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Multiple Choice: - Conceptual

This document contains 4 multiple choice questions about classifying and accounting for plant assets. Question 21 asks about items that can be included as plant assets, with only idle equipment awaiting sale being excluded. Question 22 asks about characteristics of plant assets, with acquired for resale being excluded. Question 23 asks again about characteristics of plant assets, with all options being major characteristics. Question 24 asks about how to account for a hotel purchased to be torn down for a new hotel, with the cost being capitalized as part of the cost of the new hotel.

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Chryzbryth Lorenzo
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263 views1 page

Multiple Choice: - Conceptual

This document contains 4 multiple choice questions about classifying and accounting for plant assets. Question 21 asks about items that can be included as plant assets, with only idle equipment awaiting sale being excluded. Question 22 asks about characteristics of plant assets, with acquired for resale being excluded. Question 23 asks again about characteristics of plant assets, with all options being major characteristics. Question 24 asks about how to account for a hotel purchased to be torn down for a new hotel, with the cost being capitalized as part of the cost of the new hotel.

Uploaded by

Chryzbryth Lorenzo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

MULTIPLE CHOICE—Conceptual

21. Plant assets may properly include


a. deposits on machinery not yet received.
b. idle equipment awaiting sale.
c. land held for possible use as a future plant site.
d. none of these.

22. Which of the following is not a major characteristic of a plant asset?


a. Possesses physical substance
b. Acquired for resale
c. Acquired for use
d. Yields services over a number of years

23. Which of these is not a major characteristic of a plant asset?


a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.

24. Cotton Hotel Corporation recently purchased Holiday Hotel and the land on which it is
located with the plan to tear down the Holiday Hotel and build a new luxury hotel on the
site. The cost of the Holiday Hotel should be
a. depreciated over the period from acquisition to the date the hotel is scheduled to be torn down.
b. written off as an extraordinary loss in the year the hotel is torn down.
c. capitalized as part of the cost of the land.
d. capitalized as part of the cost of the new hotel.

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