Looking for assistance with this Accounting Quiz. Multiple choice questions. For all essay questions, show your work. 1. (Multiple Choice) Which of the following items is included in property, plant, and equipment? A. Buildings and machinery which are idle. B. Land held for speculation. C. Land held for future plant expansion. D. All of the above. E. None of these. 2. (Multiple Choice) In a lump sum purchase of land, building, and equipment, the components were appraised at $10,000, $20,000, and $30,000, respectively. If $50,000 was paid for the package, how much is assigned to the equipment? A. $0. B. $10,000. C. $20,000. D. $30,000. E. None of these. 3. (Multiple Choice) The journal entry to record $100 annual of annual depreciation on a three-year old truck would require: A. a credit to Accumulated Depreciation for $300. B. a debit to Retained Earnings for $200. C. a debit to Depreciation Expense for $100. D. All of the above. E. None of these. 4. (Multiple Choice) A graph is set up with "depreciation expense" on the vertical axis and "time" on the horizontal axis. Assuming linear relationships, how would the graphs for straight-line and double-declining balance depreciation, respectively be drawn? A. Vertically and sloping down to the right. B. Vertically and sloping up to the right. C. Horizontally and sloping down to the right. D. Horizontally and sloping up to the right. E. None of these. 5. (Multiple Choice) A new truck is purchased on January 1, 20X6. The truck cost $10,000, has a 5-year life, and a $2,000 residual value. Given a December 31 year-end, and use of the double-declining balance method, how much is 20X9 depreciation expense? A. $160. B. $691. C. $864. D. $2,000. E. None of these. 6. (Multiple Choice) Which of the following equations would best represent a formula for calculating units-of-output depreciation for a period? A. Cost divided by total expected output. B. Depreciable base divided by total expected output. C. A, above, multiplied by the output for the period. D. B, above, multiplied by the output for the period. E. None of these. 7. (Multiple Choice) The USA tax code provides special tax provisions related to "deprecation." Which of these is not a valid statement? A. GAAP depreciation is generally at a faster rate than tax. B. MACRS is used to describe the tax depreciation system. C. Companies may use different depreciation systems for tax and GAAP. D. Tax codes provide "tables" of deprecation allowed in each period. E. None of these. 8. (Essay) Diamond Industries acquired a new machine at a cost of $62,000. Service life was estimated to be eight years and total units of output to be 200,000. Estimated residual value was $8,000. Compute depreciation for the second year in the life of the machine using the straight-line method. 9. (Multiple Choice) Costs related to property, plant, and equipment which are incu.

1. Looking for assistance with this Accounting Quiz. Multiple
choice questions. For all essay questions, show your work.
1.
(Multiple Choice)
Which of the following items is included in property, plant, and
equipment?
A.
Buildings and machinery which are idle.
B.
Land held for speculation.
C.
Land held for future plant expansion.
D.
All of the above.
E.
None of these.
2.
(Multiple Choice)
In a lump sum purchase of land, building, and equipment, the
components were appraised at $10,000, $20,000, and $30,000,
respectively.
If $50,000 was paid for the package, how much is assigned to
the equipment?

2. A.
$0.
B.
$10,000.
C.
$20,000.
D.
$30,000.
E.
None of these.
3.
(Multiple Choice)
The journal entry to record $100 annual of annual depreciation
on a three-year old truck would require:
A.
a credit to Accumulated Depreciation for $300.
B.
a debit to Retained Earnings for $200.
C.
a debit to Depreciation Expense for $100.
D.
All of the above.
E.

3. None of these.
4.
(Multiple Choice)
A graph is set up with "depreciation expense" on the vertical
axis and "time" on the horizontal axis.
Assuming linear relationships, how would the graphs for
straight-line and double-declining balance depreciation,
respectively be drawn?
A.
Vertically and sloping down to the right.
B.
Vertically and sloping up to the right.
C.
Horizontally and sloping down to the right.
D.
Horizontally and sloping up to the right.
E.
None of these.
5.
(Multiple Choice)
A new truck is purchased on January 1, 20X6.
The truck cost $10,000, has a 5-year life, and a $2,000 residual
value.
Given a December 31 year-end, and use of the double-declining
balance method, how much is 20X9 depreciation expense?

4. A.
$160.
B.
$691.
C.
$864.
D.
$2,000.
E.
None of these.
6.
(Multiple Choice)
Which of the following equations would best represent a
formula for calculating units-of-output depreciation for a
period?
A.
Cost divided by total expected output.
B.
Depreciable base divided by total expected output.
C.
A, above, multiplied by the output for the period.
D.
B, above, multiplied by the output for the period.
E.

5. None of these.
7.
(Multiple Choice)
The USA tax code provides special tax provisions related to
"deprecation."
Which of these is not a valid statement?
A.
GAAP depreciation is generally at a faster rate than tax.
B.
MACRS is used to describe the tax depreciation system.
C.
Companies may use different depreciation systems for tax and
GAAP.
D.
Tax codes provide "tables" of deprecation allowed in each
period.
E.
None of these.
8.
(Essay)
Diamond Industries acquired a new machine at a cost of
$62,000.
Service life was estimated to be eight years and total units of
output to be 200,000.

6. Estimated residual value was $8,000.
Compute depreciation for the second year in the life of the
machine using the straight-line method.
9.
(Multiple Choice)
Costs related to property, plant, and equipment which are
incurred subsequent to acquisition should be added to an asset's
depreciable base if the:
A.
the service life of an asset is prolonged.
B.
the quantity of services expected from an asset is increased.
C.
the quality of services expected from an asset is improved.
D.
Any of the above choices.
E.
None of these.
10.
(Multiple Choice)
A major overhaul was completed on a truck that resulted in an
extension in its useful life from three to five years.
The proper entry to reflect this transaction includes a:
A.

7. debit to Accumulated Deprecation.
B.
credit to Accumulated Depreciation.
C.
a credit to Depreciation Expense.
D.
a debit to Maintenance Expense.
E.
None of these.
11.
(Multiple Choice)
A machine that cost $9,000 with a book value of $2,000 is sold
for $1,100, and an entry is made.
Which of the following is true about the entry?
A.
Accumulated Depreciation is debited for $2,000.
B.
Machinery is credited for $2,000.
C.
Loss on Sale of Machinery is credited for $900.
D.
Accumulated Depreciation is debited for $7,000.
E.
None of these.

8. 12.
(Multiple Choice)
In an exchange transaction, the term boot means:
A.
The transaction was at a loss.
B.
The transaction was at a gain.
C.
Additional monetary consideration was given or received.
D.
The transaction has been completed.
E.
None of these.
13.
(Multiple Choice)
When should an implied loss be recognized on the exchange of
assets?
A.
When the exchange has commercial substance.
B.
When the exchange lacks commercial substance.
C.
When boot is given.
D.

9. All of the above are correct.
E.
None of these.
14.
(Multiple Choice)
Which of the following terms best relates to intangible assets?
A.
Depreciation.
B.
Depletion.
C.
Amortization.
D.
Accrual.
E.
None of these.
15.
(Multiple Choice)
The inclusion of goodwill in the financial statements of a
company indicates:
A.
that the company has a favorable reputation with its customers.
B.

10. a monopoly position in the industry or superior management..
C.
an unbroken record of annual earnings and dividends.
D.
a business acquisition at price in excess of fair value of
identifiable assets.
E.
None of these.
16.
(Essay)
On January 1, 20X1, Burrus Company purchased for $76,000,
equipment having a service life of ten years and an estimated
residual value of $4,000.
Burrus has recorded monthly depreciation of the equipment on
the straight-line method.
On December 31, 20X9, the equipment was sold for $15,000.
What is the amount of gain to be recognized as a result of this
sale?
17.
(Multiple Choice)
Current liabilities are obligations that will be paid:
A.
with cash.
B.
within one year.

11. C.
within the operating cycle.
D.
within one year or the operating cycle, whichever is shorter.
E.
None of these.
18.
(Multiple Choice)
On July 1, A company borrows $100,000 on a 5% note, due in
one year.
What adjusting entry is needed on December 31?
A.
No entry is needed.
B.
Debit Interest Expense for $5,000 and credit Interest Payable
for $5,000.
C.
Debit Note Payable for $5,000 and credit Interest Payable for
$5,000.
D.
Debit Interest Payable for $5,000 and credit Interest Expense
for $5,000.
E.
None of these.
19.

12. (Multiple Choice)
The account Discount on Notes Payable:
A.
is a contingent liability account.
B.
is a contra liability account.
C.
is an asset account because it has a debit balance.
D.
is amortized to reduce interest expense over the life of a note.
E.
None of these.
20.
(Multiple Choice)
Contingent liabilities should be recorded in the accounts when:
A.
it is probable that the future event will occur.
B.
the amount of the liability can be reasonably estimated.
C.
Either A or B, above.
D.
Both A and B, above.

13. E.
None of these.
21.
(Multiple Choice)
A balance in the Warranty Liability account:
A.
indicates that the books have not yet been closed.
B.
represents cost incurred for repairs made under warranties.
C.
is the maximum amount of liability yet to be incurred under
outstanding warranties.
D.
should be equal to the balance in the Warranty Expense account.
E.
None of these.
22.
(Multiple Choice)
Federal income taxes should not be withheld from:
A.
amounts paid to independent contractors.
B.
overtime wages.
C.

14. wages in excess of the social security base.
D.
a retiring employee's last paycheck.
E.
None of these.
23.
(Multiple Choice)
Leonard recorded gross pay of $250,000.
This is subject to employee's portion of social security and
Medicare taxes of $16,750, unemployment taxes of $3,000, and
federal tax withholdings of $46,000.
How much is payroll tax expense?
A.
$0.
B.
$16,750.
C.
$19,750.
D.
$36,500.
E.
None of these.
24.
(Essay)

15. On July 1, 20X7, Vasquez Publishing Company sold 1,000 two-
year subscriptions to a monthly magazine.
The subscriptions sold for $18 each.
The first issue was mailed at the end of July.
What is the proper balance sheet disclosure regarding this
transaction for Vasquez at December 31, 20X7?
25.
(Multiple Choice)
Which of the following is not a feature of the corporate form of
organization?
A.
Limited liability.
B.
Perpetual existence.
C.
Transferability of ownership.
D.
Limited life.
E.
None of these.
26.
(Multiple Choice)
Stringer Corporation issued 5,000 shares of $2 par value
common stock.

16. The issue price was $7.50 per share.
The entry to record this transaction includes a:
A.
debit to Cash for $10,000.
B.
debit to Paid-in Capital in Excess of Par for $27,500.
C.
debit to Common Stock for $10,000.
D.
credit to Gain on Stock $37,500.
E.
None of these.
27.
(Multiple Choice)
Normally, the payment of a previously declared dividend will
result in:
A.
a decrease in liabilities.
B.
a decrease in working capital.
C.
a decrease in stockholders' equity.
D.

17. All of the above.
E.
None of these.
28.
(Multiple Choice)
Dividends in arrears:
A.
pertain to cumulative preferred stock.
B.
are recorded as a liability.
C.
pertain to cumulative common stock.
D.
both A and B, above.
E.
None of these.
29.
(Multiple Choice)
Which of the following statements about treasury stock is true?
A.
Excess of the sales price over cost should be credited to
retained earnings.
B.

18. Gains are not recorded on treasury stock transactions but losses
are.
C.
Losses on treasury stock transactions are recorded in income.
D.
Reacquiring treasury stock causes stockholders equity to
decrease.
E.
None of these.
30.
(Multiple Choice)
Reissuing treasury stock at more than its cost will trigger a
credit to:
A.
Gain.
B.
Paid-in Capital in Excess of Par.
C.
Retained Earnings.
D.
Cash.
E.
None of these.
31.
(Multiple Choice)

19. Which of the following transactions would cause a change in
total stockholders' equity?
A.
A stock dividend.
B.
Paying a previously declared cash dividend.
C.
Reissuing treasury stock at its cost.
D.
A stock split.
E.
None of these.
32.
(Multiple Choice)
The statement of stockholders' equity includes information
about:
A.
Beginning equity account balances.
B.
Ending equity account balances.
C.
Dividends.
D.
All of the above.

20. E.
None of these.
33.
(Essay)
In its initial capital stock transaction, the Board of Directors of
Manning Corporation approved the issuance of 5,000 shares of
$5 par value common stock, which were sold on the same day
for $60 per share.
The board was authorized to issue 10,000 shares of this class of
stock.
What is the balance in the Common Stock account after
recording this stock issuance?