4.02 Prototype Assessment Items – Page 1
These prototype assessment items illustrate the types of items used in the item bank for
this objective. All items have been written to match the cognitive process of the apply
verb in the objective. These exact questions will not be used on the secure
postassessment, but questions in similar formats will be used.
Disposal of Plant Assets with No Book Value
1. Jackson Corporation discarded a flat screen monitor that originally cost $1,000.00.
The monitor had no salvage value and was fully depreciated. What is the entry to
record this transaction?
A. Debit Accumulated Depreciation $1,000.00; Credit Depreciation Expense
$1,000.00
B. Debit Accumulated Depreciation $1,000.00; Credit Office Equipment $1,000.00
C. Debit Office Equipment $1,000.00; Credit Accumulated Depreciation $1,000.00
D. Debit Office Equipment $1,000.00; Credit Depreciation Expense $1,000.00
Answer:
Disposal of Plant Assets with Book Value
2. The CD Shop discarded a display rack that originally cost $1,000.00. The display
rack had no salvage value and accumulated depreciation was $900.00. What is the
entry to record this transaction?
A.
B.
C.
D.
Debit Accumulated Depreciation $900.00; Debit Depreciation Expense
$100.00; Credit Store Equipment $1,000.00
Debit Accumulated Depreciation $900; Debit Loss on Disposal of Assets
$100.00; Credit Store Equipment $1,000.00
Debit Accumulated Depreciation $1,000.00; Credit Store Equipment $900.00;
Credit Loss on Disposal of Assets $100.00
Debit Store Equipment $1,000.00; Credit Accumulated Depreciation $900.00;
Credit Depreciation Expense $100.00
Answer:
4.02 Prototype Assessment Items – Page 2
Selling a Plant Asset
3. Fergie’s Flowers sold their delivery car for $2,000.00. The original cost of the car
was $11,000.00. The car had no salvage value and had accumulated depreciation
of $10,000.00. What is the entry to record this transaction?
A. Debit Accumulated Depreciation $10,000.00; Debit Gain on Sale of Asset
$1,000.00; Credit Vehicles $11,000.00
B. Debit Cash $2,000.00; Debit Accumulated Depreciation $10,000.00; Credit
Vehicles $11,000.00; Credit Gain on Sale of Asset $1,000.00.
C. Debit Cash $2,000.00; Debit Accumulated Depreciation $10,000.00; Credit
Vehicles $12,000.00
D. Debit Vehicles $11,000.00; Credit Accumulated Depreciation $10,000.00; Credit
Gain on Sale of Asset $1,000.00
Answer:
Trading a Plant Asset
4. Cindy’s Candy Shop traded an old company car for a new car. The original cost of
the old car was $15,000.00. Accumulated depreciation on the old car was
$10,000.00. Cash of $11,000.00 was paid in the trade. What is the entry to record
this transaction?
A. Debit Vehicles $11,000.00; Credit Cash $11,000.00
B. Debit Vehicles $16,000.00; Debit Accumulated Depreciation $10,000.00; Credit
Vehicles $15,000.00; Credit Cash $11,000.00
C. Debit Vehicles $11,000.00; Credit Accumulated Depreciation $10,000.00; Credit
Gain on Sale of Asset $1,000.00
D. Debit Vehicles $5,000.00; Debit Accumulated Depreciation $10,000.00; Credit
Vehicles $15,000.00
Answer:
4.02 Prototype Assessment Items – Page 3
Declining-Balance Method of Depreciation
5. On January 1st, Daryl’s Delivery purchased a new truck for $25,000.00. The van has
an estimated useful life of 5 years and an estimated salvage value of $5,000.00.
Tucker’s Expeditions uses double declining-balance method for depreciation. What
is the depreciation expense for the first year?
A.
B.
C.
D.
$4,000.00
$5,000.00
$8,000.00
$10,000.00
Answer:
Sum-of-the-Years’-Digits Method of Depreciation
6. On January 1st, The Jeans Shop purchased a computer for $2,000.00. The
computer has an estimated useful life of 5 years and an estimated salvage value of
$200. The Jeans Shop uses the sum-of-the-years’-digits method of depreciation.
What is the depreciation expense for the 1st year?
A.
B.
C.
D.
$120.00
$200.00
$360.00
$600.00
Answer:
Production-Units Method of Depreciation
7. Tammy’s Taxis purchased a car for $20,000.00. The car has an estimated useful
life of 200,000 miles and no estimated salvage value. Tammy’s Taxis uses the
production-units method of depreciation. In the first year of use, the car traveled
50,000 miles. What is the depreciation for the first year?
A.
B.
C.
D.
$1,000.00
$2,000.00
$5,000.00
$10,000.00
Answer: