13) An item of inventory purchased this period for $15.00 has been
incorrectly written down to its current replacement cost of $10.00. It
sells during the following period for $30.00, its normal selling price,
with disposal costs of $3.00 and normal profit of $12.00. Which of the
following statements is NOT true?
14) Designated market value
15) In no case can "market" in the lower-of-cost-or-market rule be
more than
16) A major advantage of the retail inventory method is that it
17) The gross profit method of inventory valuation is invalid when
18) The retail inventory method is based on the assumption that the
19) Which of the following is NOT a major characteristic of a plant
asset?
20) 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
21) If a corporation purchases a lot and building and subsequently
tears down the building and uses the property as a parking lot, the
proper accounting treatment of the cost of the building would depend
on
22) The period of time during which interest must be capitalized ends
when
23) To be consistent with the historical cost principle, overhead costs
incurred by an enterprise constructing its own building should be
24) When computing the amount of interest cost to be capitalized, the
concept of "avoidable interest" refers to
25) The King-Kong Corporation exchanges one plant asset for a
similar plant asset and gives cash in the exchange. The exchange is
NOT expected to cause a material change in the future cash flows for
either entity. If a gain on the disposal of the old asset is indicated, the
gain will
26) When funds are borrowed to pay for construction of assets that
qualify for capitalization of interest, the excess funds NOT needed to
pay for construction may be temporarily invested in interest-bearing
securities. Interest earned on these temporary investments should be