I. Which of the following items would not generally be viewed as a liquid asset?
ID: 2562909 • Letter: I
Question
I. Which of the following items would not generally be viewed as a liquid asset?
a. Accounts receivable. b. Marketable securities. c. Equipment. d. Cash.
II. Which of the following is an internal control over cash designed to lessen the chance of fraud?
a. Separation of duties. b. Development of approval systems and crosschecks. c. Bank reconciliations. d. All of the above.
III. Plant assets include all the following except
a. equipment. b. leasehold improvements. c. land improvements. d. inventory.
IV. Which of the following assets is not subject to either depreciation or amortization?
a. leasehold improvements. b. buildings. c. land. d. equipment.
V. Which of the following expenditures is a revenue expenditure?
a. expenditures for executive salary. b. expenditures for a building acquisition. c. expenditures for a leasehold improvement. d. expenditures for equipment acquisition.
VI. Which of the following is not a revenue expenditure?
a. costs for routine equipment repair and maintenance. b. costs for major renovation of equipment. c. costs of annual salaries to employees. d. costs of fuel to operate plant equipment.
VII. The depreciation method used on a federal tax return may differ from the depreciation method used in the company’s financial statements?
a. True b. False
VII. Which of the following items is not an intangible asset under U.S. GAAP?
a. Research and development cost. b. Goodwill. c. Patents. d. Copyrights.
IX. Under U.S. GAAP, all intangible assets should be amortized to expense over the shorter of their legal lives or their economically useful lives except
a. Goodwill. b. Patents. c. Copyrights. d. Non-compete covenants.
X. Which of the following accounts most likely represents a balance sheet current liability?
a. Bonds payable. b. Mortgage payable. c. Trade accounts payable. d. Lease liability.
Explanation / Answer
1) option c Equipment (equipment is a fixed asset) ii) option d All of the above iii) option d) inventory (inventory is a current asset) iv) option c ) land v) option a expenditures for executive salaries vi) option b costs of major renovation of Equipment vii) option a TRUE viii) option a Research and Development cost 1x) option a goodwill x) option c Trade accounts payable