Choose the correct answer (multiple choice).

QUESTION 10

1. In calculating depreciation the life of an asset refers to its:

   		legal life.
   		physical life.
   		technological life.
   		useful life.

1 points

QUESTION 11

1. Accumulated depreciation is what type of account?

   		a liability account.
   		an equity account.
   		a contra (negative) asset account.
   		an expense account.

1 points

QUESTION 12

1. Cost of sales is a major expense for a retailer. Cost of sales is:

   		the cost of the goods purchased during the period.
   		the cost of the goods sold during the period.
   		the cost of the goods available for sale during the period.
   		none of the above.

1 points

QUESTION 13

1. The common characteristic shared by all assets is:

   		their tangible nature.
   		their long life.
   		their great monetary value.
   		their expected future economic benefits.
   		all of the above

1 points

QUESTION 14

1. The statement concerning goodwill that is not correct is:

   		Goodwill can be recognised on the balance sheet only if it is purchased
   		Goodwill is calculated as the excess of the consideration paid for a business over the fair value of the net assets acquired
   		Goodwill can only be purchased when a business is acquired as a going concern
   		Goodwill represents the value of trademarks, brand names, patents, licences etc
   		None of the statements is incorrect; i.e. all are correct statements

1 points

QUESTION 15

1. A machine is purchased for $130000. It is estimated that it has a useful life of 8 years and will then be sold for $10000. Using the straight-line method calculate the amount of depreciation to be charged for each year of useful life.

   		$1625
   		$10000
   		$16250
   		$15000
   		$0