11 an expenditure to improve an asset can be added to the depreciable basis of that 4313802

11 an expenditure to improve an asset can be added to the depreciable basis of that 4313802

11.An expenditure to improve an asset can be added to the depreciable basis of that asset if the expenditure extends the life of the asset.

a.True

b.False

12.Under IFRS, the costs of relocating property, plant, and equipment can be capitalized as assets and depreciated over the period of expected benefit.

a.True

b.False

13.Under the full-cost method, only the costs associated with the exploration that resulted in thesuccessfuldiscovery of oil and gas can be capitalized.

a.True

b.False

14.Under the full-cost method, the costs associated with dry wells can be capitalized as part of the oil and gas reserves.

a.True

b.False

15.Alternative terms for property, plant, and equipment include all of the following except

a.plant assets.

b.fixed assets.

c.long-term assets.

d.operational assets.

16.All of the following would be classified as property, plant, and equipment except

a.office buildings.

b.machinery owned for standby purposes.

c.equipment held for resale.

d.equipment used in the operation of the business.

17.Which of the following assets would be classified as property, plant, and equipment?

a.Office building to be demolished in nine months

b.Natural gas reserves expected to produce for more than a decade

c.Land held as a long-term investment

d.Financial securities expected to produce significant returns for the next seven years

18.Advantages of using historical cost as the basis of valuation of property, plant, and equipment include all of the following except

a.it is representationally faithful.

b.gains and losses from holding the asset are recognized in the period of value change.

c.cost equals the fair market value at the date of acquisition.

d.it is consistent with the valuation of many other assets and liabilities.

19.To be included in property, plant, and equipment, an asset must have all of the following except

a.the asset must be held for use.

b.the asset must have an expected life of a normal operating cycle.

c.the asset must be tangible in nature.

d.the asset must have an expected life of more than one year.

20.Which one of the following types of assets should not be classified as property, plant, and equipment?

a.leasehold improvements

b.fully-depreciated building (still in use)

c.idle land and buildings

d.long-lived tangible assets

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