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THEORIES Small tools and containers used repeatedly for more than ayear are classified on the balance sheet as Select one: a. investments b. current assets c. deferred charges d. fixed assets answer is: fixed assets Major space parts and stand-by equipment which an entity expects to use over more th...

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THEORIES 1. Small tools and containers used repeatedly for more than a year are classified on the balance sheet as Select one: a. investments b. current assets c. deferred charges d. fixed assets answer is: fixed assets

2. Major space parts and stand-by equipment which an entity expects to use over more the one period would qualify as Select one: a. Property, plant and equipment b. Inventory c. Expense d. Deferred charge answer is: Property, plant and equipment

3. Which is incorrect concerning self-constructed asset? Select one: a. The cost of self-constructed asset is determined using the same principles as for an acquired asset. b. If an entity makes similar assets for sale in the normal course of business, the cost of the asset is usually the same as the cost of constructing an asset. c. Any internal profits from construction are eliminated in arriving at the cost selfconstructed asset. d. The cost of abnormal amounts of wasted material, labor or other resources incurred in the production of a self-constructed asset is not excluded in the cost of asset. answer is: The cost of abnormal amounts of wasted material, labor or other resources incurred in the production of a self-constructed asset is not excluded in the cost of asset.

4. Cost directly attributable to bringing the asset to the location and condition for its intend use does not exclude all of the following, except Select one: a. Assembly cost for machinery b. Cost of employee benefits not arising directly from the construction and acquisition of property, plant and equipment. c. Cost of site preparation d. Cost to remove old building answer is: Cost of employee benefits not arising directly from the construction and acquisition of property, plant and equipment. 5. Costs that are not included in the carrying amount of an item of property, plant and equipment but expensed immediately do not exclude all of the following, except Select one: a.Cost of introducing a new product or service b.Cost of salary paid to testing personnel c. Cost of relocation or reorganizing asset in the facility d. Cost of opening a new facility answer is: Cost of salary paid to testing personnel 6. All of the following are required disclosure under PAS 16, except? Select one: a. changes in fair values of assets measured under cost model. b. commitments related to items of property, plant, and equipment. c. reconciliation of carrying amounts at the beginning and end of the year. d. accounting policies and estimates of useful lives and residual value. answer is: changes in fair values of assets measured under cost model. 7. The cost of property acquired by installment is equal to Select one:

a. List price b. Invoice price c. Cash purchase price d. Installment price answer is: Cash purchase price 8. If an entity is able to determine reliably the fair value of either the asset received or the asset given up, which is used in measuring the cost of the asset received? Select one: a. Carrying amount of asset given up b. Either fair value of asset given up or fair value of asset received c. Fair value of asset received d. Fair value of asset given up answer is: Fair value of asset given up 9. In the case of a nonmonetary grant, which of the following accounting treatments is prescribed by PAS 20? Select one: a. Record the asset at replacement cost and the grant at a nominal value b. Record the grant at a value estimated by management c. Record both the grant and the asset at fair value of the nonmonetary asset d. Record only the asset at fair value, do not recognize the fair value of the grant. answer is: Record both the grant and the asset at fair value of the nonmonetary asset

10. If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on Select one: a. the significance of the cost allocated to the building in relation to the combined cost of the lot and building b. the intention of management for the property when the building was acquired

c. the contemplated future use of the parking lot d. the length of time for which the building was held prior to its demolition answer is: the intention of management for the property when the building was acquired 11. The cost of an item of property, plant and equipment that is acquired in exchange for combination of monetary and nonmonetary asset is measured at the Select one: a. Fair value of the asset given up b. Fair value of the asset received c. Fair value of the asset given up plus the amount of any cash or cash equivalent transferred. d. Fair value of the asset received plus the amount of any cash or cash equivalent transferred answer is: Fair value of the asset given up plus the amount of any cash or cash equivalent transferred.

12. Which of the following is least likely to be classified in property, plant and equipment? Select one: a. leasehold improvements b. land c. land improvements d. idle land answer is: idle land 13. The fair value at initial recognition is Select one: a. The price paid to acquire the asset. b. The price paid to acquire the asset less transaction costs. c. The price paid to transfer or sell the asset. d. The carrying amount of the asset acquired. answer is: The price paid to acquire the asset.

14. Under PAS 20, which of the following is not specifically excluded from the purview of government grant? Select one: a. Government grant in relation to agriculture b. Forgivable loan from the government c.Government assistance provided in the form of tax benefits d. Government participation in ownership of the entity. answer is: Forgivable loan from the government...