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15 terms

Accounting

Quiz 9 & 10
STUDY
PLAY
Which of the following assets does not decline in service potential over the course of its useful life?
Land
Interest may be included in the acquisition cost of a plant asset
during the construction period of a self-constructed asset.
The balance in the Accumulated Depreciation account represents the
amount charged to expense since the acquisition of the plant asset
In computing depreciation
salvage value is, an estimate of a plant asset's value at the end of its useful life
Which of the following methods will result in the highest depreciation in the first year?
Declining-balance
Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally
expensed when incurred.
The cost of an intangible asset with an indefinite life should
not be amortized
Plant assets are ordinarily presented in the balance sheet
at cost less accumulated depreciation
A current liability is a debt that can reasonably be expected to be paid
within one year, or the operating cycle, whichever is longer
As interest is recorded on an interest-bearing note
the Interest Expense account is, increased; the Interest Payable account is increased
The amount of sales tax collected by a retail store when making sales is
a current liability
Bonds that may be exchanged for common stock at the option of the bondholders are called
convertible bonds
When authorizing bonds to be issued
the board of directors does not specify the, selling price
If the market rate of interest is greater than the contractual rate of interest
bonds will sell, at a discount
The statement "Bond prices vary inversely with changes in the market rate of interest" means that if the
market rate of interest decreases, then bond prices will go up