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51 an adjusting entry to convert an asset to expense consists of a a debit to a liab 4295435

 

 

51.An adjusting entry to convert an asset to expense consists of: 
 
 

A. A debit to a liability and a credit to cash.

 

B. A debit to an expense and a credit to cash.

 

C. A debit to an expense and a credit to an asset account.

 

D. A debit to an asset account and a credit to an expense account.

 

 

 

 

52.Which statement is true about land? 
 
 

A. Land should be depreciated over the same period as the building located on it.

 

B. Land cannot be depreciated for greater than a 40-year period.

 

C. Land should not be depreciated.

 

D. The straight line method should be used to depreciate land.

 

 

 

 

53.Depreciation expense is: 
 
 

A. Only an estimate.

 

B. An exact calculation prepared by an appraiser.

 

C. Not to be calculated unless the exact life of an asset can be determined.

 

D. To be determined for all assets owned by a company.

 

 

 

 

54.The cost of insurance is considered an expense: 
 
 

A. Only when the entire policy period has passed.

 

B. Only when the policy is purchased.

 

C. Only when the premium is paid.

 

D. Evenly over the term of the policy.

 

 

 

 

55.Shop supplies are expensed when: 
 
 

A. Consumed.

 

B. Purchased.

 

C. Paid for.

 

D. Ordered.

 

 

 

 

56.Accumulated depreciation is: 
 
 

A. The depreciation expense recorded on an asset to date.

 

B. The remaining book value of an asset.

 

C. The depreciation expense taken on an asset during the current period.

 

D. An expense on the income statement.

 

 

 

 

57.In which of the following situations would the largest amount be recorded as an expense of the current year? (Assume accrual basis accounting.) 
 
 

A. $4,000 is paid in January for equipment with a useful life of four years.

 

B. $1,800 is paid in January for a two-year fire insurance policy.

 

C. $1,200 cash dividends are declared and paid.

 

D. $900 is paid to an attorney for legal services rendered during the current year.

 

 

 

 

58.Gourmet Shop purchased cash registers on April 1 for $12,000. If this asset has an estimated useful life of four years, what is the book value of the cash registers on May 31? 
 
 

A. $250.

 

B. $3,000.

 

C. $9,000.

 

D. $11,500.

$12,000/48 = $250; $12,000 – (2 × $250) = $11,500

 

 

 

59.An asset purchased on January 1, 2012 for $60,000 that has an estimated life of 10 years will have a book value on December 31, 2015 of: 
 
 

A. $60,000.

 

B. $24,000.

 

C. $36,000.

 

D. $42,000.

$60,000/10 = $6,000 × 4 = $24,000; $60,000 – $24,000 = $36,000

 

 

 

60.If an asset was purchased on January 1, 2012 for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, 2015? 
 
 

A. $28,000.

 

B. $112,000.

 

C. $56,000.

 

D. $84,000.

$140,000/5 = $28,000 × 4 = $112,000

 

 

 

 

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