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5 Written questions

5 Matching questions

  1. Ordinary repairs
  2. Intangible asset
  3. Depletion
  4. Materiality Priciple
  5. Licenses
  1. a Rights, priviliages, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance
  2. b The allocation of the cost of a natural resource to expense over its useful life in a rational and systematic manner
  3. c Expenditures to maintain the operating efficiency and productive life of a unit.
  4. d If an item would not make a difference in decision making, a company does not have to follow GAAP in reporting it.
  5. e Operating rights to use public property, granted to a business enterprise by a governmental agency.

5 Multiple choice questions

  1. An estimate of the expected productive life, also called service life, of an asset
  2. Assets that consist of standing timber and underground deposits of oil,gas, or minerals
  3. States that the company will continue in operation for the forseeable future
  4. Expenditures that may lead to patents, copyrights, new processes, or a new products.
  5. A measure of how efficienly a company uses its assets to generate sales; calculated as net sales divided by average total assets

5 True/False questions

  1. Revenue expendituresExpenditures that are immedietely charged against revenues as an expense.


  2. AmortizationThe allocation of the cost of an intangible asset to expense over its useful life in a systematic and rational matter


  3. Straight-line methodDepreciation method that applies a constant rate to the declining book value of the asset and produces a decreasing annual depreciation expense over the useful life of the asset


  4. CopyrightExclusive grant from the federal government that allows the owner to reproduce and sell an artistic or published work


  5. Salvage valueAn estimate of an asset's value at the end of its useful life