CHAPTER 6 NAME ___________________________________
TEN-MINUTE QUIZ SECTION _____________ DATE____________
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_____ 1. Long-term assets are assets that will be:
a. Used up in one accounting period
b. Used for more than one accounting period
c. Converted into cash within one year
d. Sold in the near future
_____ 2. Assets that you can see and touch are:
a. Long-term assets
b. Intangible assets
c. Tangible assets
d. Current assets
_____ 3. Intangible assets include:
a. Copyrights
b. Trademarks
c. Goodwill
d. All of the above
_____ 4. Depreciation is defined as:
a. A decline in market value of a long-term asset
b. A systematic, rational process to allocate the cost of a long-term asset
c. Deterioration of a long-term asset
d. Accruing an expense
_____ 5. Amortization is used to describe the writing off of:
a. Equipment
b. Tangible assets
c. Natural resources
d. Intangible assets
_____ 6. Natural resources are written off through a process known as:
a. Depletion
b. Depreciation
c. Amortization
d. Capitalization
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-1
_____ 7. Equipment costing $18,000 was purchased on January 1, 20X2. It has an
estimated useful life of 5 years and a residual value of $3,000. What is
depreciation expense under straight-line for 20X5?
a. $3,000
b. $6,000
c. $9,000
d. $15,000
_____ 8. Straight-line depreciation expense is calculated as:
a. (Cost – book value) / Useful life
b. Depreciable base / Useful life
c. (Cost – salvage value) / Depreciable base
d. Book value / Useful life
_____ 9. Land and building were purchased together for $180,000. Independent separate
appraisals were obtained that valued the land at $50,000 and the building at
$150,000. How much will the land account be valued at?
a. $50,000
b. $90,000
c. $45,000
d. Land cannot be recorded separately for this purchase.
_____ 10. If the cash proceeds exceed the book value of a long-term asset at the date of
disposal:
a. A loss will be recognized
b. A gain will be recognized
c. Neither a gain nor loss will be recognized
d. The residual value must be revised
ANSWER KEY – CHAPTER 6 – TEN-MINUTE QUIZ
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-2