Fundamental Accounting Principles Volume 2 17th Edition By Kermit D. Larson test bank

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141)       Non-current assets can be divided into two groups including tangible and intangible assets. These assets are generally used in operations of a business and have useful lives extending over more than one accounting period.

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142)       Land purchased as a building site is a tangible asset called property, plant and equipment and is classified under the "Long-term Investments" section on the balance sheet.

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143)       The cost of an asset includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use.

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144)       If a machine is damaged during unpacking, the repairs are added to its cost.

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145)       To be charged to and reported as part of the cost of property, plant and equipment, an expenditure must be normal, reasonable, and necessary in preparing the asset for its intended use.

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146)       The purchase of real estate that includes land, building, and land improvements is called a lump-sum purchase.

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147)       Any expenditures for legal fees, surveying, and accrued property taxes should not be included in the cost of land.

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148)       Revenue expenditures are additional costs of property, plant and equipment that provide material benefits extending beyond the current period.

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149)       Revenue expenditures are expenditures to keep assets in normal operating condition.

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150)       Capital expenditures are also called balance sheet expenditures.

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151)       SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to Store Building.

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152)       Treating small-dollar-amount capital expenditures as revenue expenditures is likely to mislead users of financial statements.

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153)       The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

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154)       Subsequent expenditures are purchases made after the acquisition of equipment to operate, maintain, repair, and improve it.

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