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@ All rights reserved for Economic Learning Center. The enrolled students for ELC revision courses
have the right to benefit from it for himself only. No part of this notes may be resold / copied /
spread / donated / and/or re-printed to others, or taught to the others through it, or utilized them
in any form or means without a written permission from ELC management or the ELC teacher.
ACC113
Mid-Term Revision
1st Semester 2021/2022
Multiple Choice Questions
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
1 | Page
Chapter 10
1. Depreciation expense is calculated using its cost, estimates of an asset’s salvage value,
and an estimated useful life.
a) True.
b) False.
2. The units-of-production method of depreciation charges a varying amount of expenses for
each period of an asset’s useful life.
a) True.
b) False.
3. Revenue expenditures are also called balance sheet expenditures.
a) True.
b) False.
4. Riffa Enterprises purchased a depreciable asset on October 1, Year 1 at cost of $132,000.
The asset is expected to have a salvage value of $15,800 at the end of its five-year useful
life. If the asset is depreciated on the double-declining balance method, the asset’s book
value on December 31, Year 2 will be :
a) $71,280.
b) $28,512.
c) $37,908.
d) $25,272.
5. A company purchased a delivery van for $18,200 with a salvage value of $2,200 on
September 1, Year 1. It has an estimate useful life of 5 years. Using the straight-line method,
how much depreciation expense should the company recognize on December 31, Year 1.
a) $3,200.
b) $3,640.
c) $800.
d) $1,067.
6. An asset’s market value includes all normal and reasonable expenditures necessary to get
the asset in place ready to intended use.
A) True.
B) False.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
2 | Page
7. Depreciation does not measure the decline in market value of an asset each period.
A) True.
B) False.
8. Extraordinary repairs are expenditures extending the asset’s useful life beyond its estimate,
and are capital expenditures because they benefit future periods.
A) True.
B) False.
9. When originally purchased a truck costing BD 23,000 had an estimated useful life of 8 years
and an estimated salvage value of BD 3,000. After 4 years of straight-line depreciation, the
asset’s total useful life revised from 8 years to 6 years and there was no change in the
estimated salvage value. The depreciation expense in year 5 equals:
A) BD 2,875.
B) BD 5,750.
C) BD 5,000.
D) BD 2,500.
10. A company purchased a mineral for BD 800,000. It expects to produce 120,000 tons of
minerals and to have a salvage value of BD 50,000. In current year, the company mined
and sold 9,000 tons of minerals. Its depletion expense for the current period equals:
A) BD 56,250.
B) BD 139,500.
C) BD 150,000.
D) BD 15,000.
11. Revenue expenditures:
A) Are additional costs of plant assets that do not materiality increase the asset’s life or
its productivity capabilities.
B) Are known as balance sheet expenditures because the relate to plant assets.
C) Extend the asset’s useful life.
D) Substantially benefit future period.
12. Saya Company purchased a machine on January 1 from BD 1,700. This machine has useful
life of 10 years and a salvage value of BD 200. What would be the book value of asset at
the end of the first year of its useful life using the double-declining-balance method?
A) BD 340.
B) BD 1,160.
C) BD 300.
D) BD 1,360.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
3 | Page
13. Owning patent:
A) Gives the owner the exclusive right to publish and sell music or literary work during
the life of the creator plus 70 years.
B) Gives its owner an exclusive right to manufacture and sell a device or to use a
process for 50 years.
C) Gives its owner exclusive right to manufacture and sell a patented item or to use a
process for 20 years.
D) Gives the owner the exclusive right to publish and sell music or literary work during
the life of the creator plus 17 years.
14. A company purchased a machine for BD 190,000. The machine has a useful life of 8 years
and a residual value of BD 10,000. It is estimated that the machine could produce 75,000
units over its useful life. In the first year, 15,000 units were produced. In the second year,
production increased to 19,000 units. Using the units production method, what is the
amount of accumulated depreciation at the end of the second year?
A) BD 48,133.
B) BD 81,600.
C) BD 45,600.
D) BD 23,750.
15. Plant assets ae used in operations and have useful life that extend over more than one
accounting period.
A. True.
B. False.
16. Extraordinary expenditures:
A. Are additional costs of plant assets that do not materiality increase the asset’s life.
B. Are revenue expenditures.
C. Extend the useful life of an asset beyond its original estimate.
D. Are expensed when incurred.
17. The depreciation method that charges the same amount of expense to each period of the
asset’s useful life is called:
A. Straight line.
B. Double decline.
C. Double balance.
D. Unit production.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
4 | Page
18. Residual value is an estimate of an asset’s value at the end of its useful life.
A. True.
B. False.
19. Amortization:
a. The systematic allocation of the cost of an intangible asset to expense over its
estimated useful life.
b. The process of allocating the cost of natural resources to periods when they are
consumed.
c. An accelerated form of expensing asset’s cost.
d. The process of allocating to expense the cost of plant asset to the accounting
periods benefiting from its use.
e. Also called depletion.
20. Ngu owns equipment that cost $104,900 with accumulated depreciation of $71,600. Ngu
asks $37,850 for the equipment but sells the equipment for $34,900. Compute the amount
of gain or loss.
a. $1,600 gain.
b. $4,550 loss.
c. $1,600 loss.
d. $4,550 gain.
21. A company had a tractor destroyed by fire. The tractor originally cost $132,000 with
accumulated depreciation of $66,300. The proceeds from the insurance company were
$27,000. The company should recognize:
a. A loss of $65,700.
b. A loss of $38,700.
c. A gain of $65,700.
d. A gain of $38,700.
22. The cost of land would not include:
a. Cost of parking lot lighting.
b. Costs of removing existing structures.
c. Government assessment.
d. Purchase price.
e. Fess for insuring the title.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
5 | Page
23. Land improvements are:
a. Also called basket purchases.
b. Assets that increase the usefulness of land, but have a limited useful life and are
subject to depreciation.
c. Assets that increase the usefulness of land, and like land, are not depreciated.
d. Expensed in the period incurred.
e. Included in the cost of land account.
24. Depreciation:
a. Measures the decline market value of an asset.
b. Is an outflow cash from the use of plant asset.
c. Measures physical depreciation of an asset.
d. Is applied to land.
e. Is the process of allocating the cost of plant asset to expense.
25. Plant assets are defined as:
a. Current assets.
b. Tangible assets that have a useful life of more than one accounting period and are
used in the operation of a business.
c. intangible assets that have a useful life of more than one accounting period and
are used in the operation of a business.
d. Tangible assets used in the operation of a business that have a useful life of less
than one accounting period.
26. Which of the following is not classified as plant assets?
a. Patent.
b. Land.
c. Land Improvements.
d. Machinery and Equipment.
27. A company purchased a tract of land for its natural resources at a cost of $1,714,000. It
expects to mine 2,080,000 tons of ore from this land. The salvage value of land is expected
to be $258,000. The depletion expense per ton of ore is:
a. $0.824.
b. $0.700.
c. $6.643.
d. $0.948.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
6 | Page
28. Gaston owns equipment that cost $15,500 with accumulated depreciation of $4,650.
Gaston sells the equipment for $9,800. Which of the following would not be part of the
journal entry to record disposal of equipment?
a. Debit Accumulated Depreciation $4,650.
b. Credit Gain on Disposal of Equipment $1,050.
c. Credit Equipment $15,500.
d. Debit Loss on Disposal of Equipment $1,050.
e. Debit Cash $9,800.
29. Peavey Enterprises purchased a depreciable asset for $22,500 on April 1, Year 1. The asset
will be depreciated using straight-line method over its four-year useful life. Assuming the
asset’s salvage value is $2,100. Peavey Enterprises should recognize depreciation expense
in Year 2 in the amount:
a. $5,100.
b. $4,250.
c. $19,550.
d. $20,400.
30. Granite Company purchased a machine costing $121,000, terms 2/10, n/30. The machine
was shipped FOB shipping point and fright charges were $2,100. The machine requires
special mounting and wiring connection costing $10,100. When installing the machine,
$1,600 in damages occurred. Compute the cost recorded for this machine assuming
Granite paid within the discount period.
a. $130.280.
b. $136,200.
c. $133,780.
d. $130.780.
31. Similar to land, land improvement are not subject to annual depreciation.
a) True.
b) False.
32. Depreciation expense is higher and income is lower in the short run when using
accelerated method of depreciation versus straight line methods.
a) True.
b) False.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
7 | Page
33. The assets book value is determined by deducting the residual value from its original cost.
a) True.
b) False.
34. The cost of land improvements includes fencing, paving, parking.
a) True.
b) False.
35. When a land is purchased, the cost of removing an existing old building is not added to the
land cost.
a) True.
b) False.
36. Land is the only asset that is not subject to annual depreciation.
a) True.
b) False.
37. According to the straight line depreciation method, a decreasing amount of depreciation
expense is calculated and recorded with each year of the assets useful life.
a) True.
b) False.
38. A plant assets useful life might not be the same as its productive life.
a) True.
b) False.
39. The total amount of depreciation expense over an assets useful life will be the same under
all methods of depreciation.
a) True.
b) False.
40. An accelerated depreciation methods yield smaller depreciation expense in early years of
an asset’s life and larger depreciation expense in later years.
a) True.
b) False.
له يجوز ولا للدراسة، فقط لنفسه منها الإنتفاع بالدورة للمسجل يحق حيث. الإقتصادي التعلم لمركز محفوظة النشر حقوق@
النقل أو خلالها، من الغير تدريس أو للغير، طباعتها/ بها التبرع/ تناقلها/ تصويرها أو المذكرات، هذه بيع
. بالمركز المادة مدرس أو المركز إدارة من مكتوب بإذن إلا كانت، طريقة بأي محتوياتها من
1st Semester 2021/2022
8 | Page
Chapter 11
1. The different between amount received from issuing a note payable and the amount
repaid at maturity us referred to:
A) Principle.
B) Cash.
C) Interest.
D) Face Value.
2. All of the following are true about know liabilities except:
A) Can arise from assignment or concerts.
B) Are measurable.
C) May depend on some future occurring.
D) Include accounts payable, note payables, and payroll.
3. Debt guarantees are:
A) Considered to be contingent liabilities.
B) Recorded as liabilities event though it is highly unlikely that the original debtor will
default.
C) Never disclosed in the financial statements.
D) A bad business practice.
4. Which of the following do not apply to unearned revenues?
A) Result from prepayments for concert tickets.
B) May also be called deferred revenues.
C) Amounts received in advance from customers for future delivery of products or
services.
D) Amounts to be received in future from customers for delivery of products or services
in the current period.
5. A company estimates that warranty expense will be 4% of sales. The company’s sales for
the current period are BD 185,000. The current period’s entry to record warranty expense
is:
A) No entry is recorded until the items are returned for warranty repairs.
B) Debit Warranty Expense BD 7,400; Credit Sales BD 7,400.