12 Accounting - Thursday January 22, 2015

11 Questions | Total Attempts: 65

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Thursday Quizzes & Trivia

Questions and Answers
  • 1. 
    Which method of amortization is used when calculating net income for income tax purposes in Canada?
    • A. 

      Straight-Line

    • B. 

      Double Declining Balance

    • C. 

      Units of Activity

    • D. 

      Capital Cost Allowance

  • 2. 
    In the Units of Activity method of Amortization, what is the formula for Amortization per unit?
    • A. 

      (Original Cost - Salvage Value) / Useful Life (in years)

    • B. 

      Net book Value * 2 * Amortization Rate

    • C. 

      (Original Cost - Salvage Value) / Useful Life (in units)

    • D. 

      Original Cost - Accumulated Amortization

  • 3. 
    An expenditure is a capital expenditure if ...
    • A. 

      It benefits both current and future accounting periods.

    • B. 

      It is routine and recurring in nature.

    • C. 

      It benefits only the current accounting period.

    • D. 

      It is an immaterial amount of money.

  • 4. 
    Which of the following expenditures can be capitalized by debiting the 'Building' account?
    • A. 

      Construction costs

    • B. 

      Architect fees

    • C. 

      Fees for building permits

    • D. 

      All of the above

  • 5. 
    The costs associated with paving the parking lot should be debited to which account?
    • A. 

      Land

    • B. 

      Land Improvements

    • C. 

      Building

    • D. 

      Equipment

  • 6. 
    Which method of amortization will usually recognize more amortization expense in the earliest years of an asset's life?
    • A. 

      Straight Line

    • B. 

      Double Declining Balance

    • C. 

      Units of Activity

  • 7. 
    If you capitalize an expenditure, rather than expensing it, what are the effects on the financial statements?
    • A. 

      Increases total assets, decreases net income

    • B. 

      Decreases total assets, increases net income

    • C. 

      Increases total assets, increases net income

    • D. 

      Decreases total assets, decreases net income

  • 8. 
    Which of the following rules applies to all of the straight line, declining balance, and units of activity methods of amortization?
    • A. 

      Don't amortize beyond the point where net book value = salvage value.

    • B. 

      Only expense 6 months of amortization in the years of acquisition and disposal.

    • C. 

      The amount of amortization expense should fall every year.

    • D. 

      Assets are assigned an asset class, which determines their amortization rate.

  • 9. 
    The choices below are all expenditures involved in the Senior School / Athletic Complex building project.  Which one is an example of a revenue expenditure?
    • A. 

      Paying electricians to wire the buildings

    • B. 

      Costs of fundraising

    • C. 

      Buying raw materials (concrete, lumber, window panes etc.)

    • D. 

      None of the above

  • 10. 
    How do you find the amortization rate for the double declining balance method?
    • A. 

      =2*(1 / useful life)

    • B. 

      =2*(1 / salvage value)

    • C. 

      =2*(1 / original cost)

    • D. 

      =2*(1 / CCA rate)

  • 11. 
    Which one do you like?
    • A. 

      Option 1

    • B. 

      Option 2

    • C. 

      Option 3

    • D. 

      Option 4

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