Which of the following asset categories would include the cost of clearing land

Question

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?
A. Land improvements
B. Machinery and equipment
C. Buildings
D. Land

An asset was purchased for $12,000. The asset's estimated useful life was 5 years, and its residual value was $2,000. Straight-line depreciation was used. How much gain or loss is reported if the asset is sold for $3,000 at the end of the fifth year?
A. $1,000 gain
B. No gain or loss
C. $2,000 loss
D. $1,000 loss

Which of the following intangible assets bars other manufacturers from using the same name for a product?
A. Copyright
B. Franchise
C. Trademark
D. Patent


Which of the following types of expenses result from a decline in the utility of an intangible asset?
A. Amortization
B. Depreciation
C. Depletion
D. Obsolescence

Which of the following is the expense resulting from a decline in the utility of a natural resource?
A. Amortization
B. Obsolescence
C. Depreciation
D. Depletion

Explanation / Answer

1. A. Land improvements 2.       Gain = Sold price - Slavage value                = $3,000 - $2,000                = $1,000    Gain is $1,000 A. Gain $1,000 3. C. Trade mark 4. A. Amortization 5. B. Obsolescence.

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