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

       D) A gain of $20,000
       E) A gain of $2,000
      






21)  A main accounting issue for property, plant and equipment is

      
       A) The cost of property, plant and equipment   
       B) Testing property, plant and equipment for impairment
       C) Accounting for repairs and improvements to property, plant and equipment
       D) Disposal of property, plant and equipment
       E) All of the choices are correct
      






22)  If the book value (or carrying amount) of a PPE item is greater than the amount to be recovered through the asset's use or sale, the asset is said to be

      
       A) Exchanged    
       B) Declined
       C) Accumulated
       D) Improved
       E) Impaired
      






23)  Inadequacy refers to

      
       A) The condition where the capacity of a property, plant and equipment asset is too small to meet the company's productive demands    
       B) An asset that is worn out
       C) An asset that is no longer useful
       D) The same as obsolescence
       E) All of these
      






24)  Residual value is

      
       A) The same as an asset's service life  
       B) The cost of an asset minus its accumulated depreciation
       C) An estimate of the asset's value at the end of its useful life
       D) Another name for market value
       E) All of the choices are correct
      






25)  Once the estimated depreciation for an asset is calculated

      
       A) It cannot be changed due to the historical cost principle   
       B) It may be revised based on new information
       C) Any changes are accumulated and recognized when the asset is sold
       D) The estimate itself cannot be changed, however, new information should be disclosed in financial statement footnotes
       E) It may be revised based on new information and any changes are accumulated and recognized when the asset is sold
      






26)  Subsequent capital expenditures

      
       A) Are expenditures making a property, plant and equipment asset more efficient 
       B) Are often called improvements
       C) Are added to the cost of the asset
       D) Often extend an asset's useful life
       E) All of the choices are correct
      






27)  Natural resources

      
       A) Include trees, mineral deposits, and oil and gas fields
       B) Are consumed when used
       C) Are long-term assets
       D) Can be amortized.
       E) All of the choices are correct
      






28)  Property, plant and equipment include

      
       A) Land
       B) Land improvements
       C) Buildings