Final Exam

Question 1

Which of the following is not a tangible asset?
o Building 
o Copyright 
o Land
o Gold

Answer 1

o Copyright

Question 2

Land is different from other tangible assets in that its utility is not diminished by its use. This statement is:
o True o False

Answer 2

True

Question 3

Which of the following is an intangible asset?
o Patent
o Copyright
o Trademark
o All of the answers are names of intangible assets

Answer 3

o All of the answers are names of intangible assets

Question 4

Capitalizing the cash cost of a piece of equipment is:
o An asset exchange event 
o An asset source event
o An asset use event
o An equity exchange event

Answer 4

o An asset exchange event

Question 5

Corazon company purchased an asset with a list price of $14,000. Corazon paid $500 of transportation- in cost, $800 totrain an employee to operate the equipment, and $200 to insure the asset against theft after it has been set up in the factory. The asset was purchased under terms 1/20/n30 and Corazon paid for the asset within the discount period. Based on this information, Corazon would capitalize the asset on its books at:

o $14,000
o $14,660
o $15,160
o $14,800

Answer 5

o $15,160

Question 6

All training costs associated with the purchase and continuing use of an asset should be capitalized in the asset account. This statement is:
o True o False

Answer 6

False

Question 7

When the total estimated market value of an asset acquired in a basket purchase is greater than the cost of the purchase, the company making the purchase must recognize a gain:
o True o False

Answer 7

False