1, The term capitalize means to record an expenditure as an expense. True or Fal

ID: 2578088 • Letter: 1

Question

1, The term capitalize means to record an expenditure as an expense. True or False.

2, Cash received from the sale of salvaged materials increase the total recorded cost of the land. T or F

3, Most if the costs associated with internally developed intangible assets are recorded as intangible assets on the balance sheet. T or F

4, Goodwill is recorded as an intangible asset on the balance sheet only when it is purchased as part of the acquisition cost of another company. T or F

5, Book value is equal to the original cost of the asset less the toal balance in accumulated depreciation. T or F

6, Impairment occurs when the future cash flows geerated for a long-term asset fall below its fair value. T or F

7, Circle Co purchased a piece of equipment by paying $10,000 cash. There was a shipping cost of $1,200 and a renovation cost of $3,200 to the building to get the space ready for the installation. There was also an installation cost of $1,000. What should be the recorded cost of this piece of equipment?

Explanation / Answer

1.) False : The term Capitalise means to record the it on the balance sheet (assets/liabilities) and not to record as a revenue expenditure.

2.) False: The Salvage cost will not increase the land cost. The Land should be always shown at the Book value. Land cannot be depreciated.

3.)False : Internally generated Intangible asset will not be shown in the balance sheet . They are generally show in the Revenue account.

4.) True : good will be appearing in the balance sheet only when we purchase as a part of acquisition cost of another company.

5.) True: Book Value is equal to the original cost of the asset less the total balance in the accumulated depreciation.

6.) True: Impairment is the concept when the realisable amount is lesser than the carrying amount impairment arises. hence the statement impairment occurs when future cash flows generated for a long term fall below its fair value is correct.

7.) The Equi[pment is recorded at a cost : ($10,000 + $1,200 + $3,200)=$14,400

Navigate

1, The following type of mutation is most likely to result in an error protein s

1, This is the totality of methods and treatment employed in the collection , de

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

1, The term capitalize means to record an expenditure as an expense. True or Fal

Question

Explanation / Answer

Related Questions

Navigate