Accountıng Iı

Yanıt Açıklaması: Intangible assets don’t have a physical substance or form unlike property, plant and equipment assets. Instead, intangible assets convey special rights from patents, copyrights, licenses, trademarks, etc. and other inventive works. Besides these, intangible assets also include pre-operating costs, research and development costs and leasehold improvements.

Yanıt Açıklaması: When the first journal entry to record the purchase of equipment, equipment 100 will be debited, account payable 100 will be credited.

Yanıt Açıklaması: The correct answer is B. Companies may direct their idle or excess cash into either debt securities or equity securities, as the two main groups of investment alternatives. Debt securities are not a single investment alternative.

Yanıt Açıklaması: The cost of the vehicles include the purchase price and other necessary expenditures made to bring them to their intended uses. If the expenditure made for vehicles extends the useful life of the vehicle and/ or increases the capacity, like modification or engine renewal, then these expenditures will be capitalized. But the regular maintenance expenditures such as oil change or minor engine repairs will be recorded as period expenses. The correct answer is D.

Yanıt Açıklaması: There are also some expenditures made for building and these expenditures yielded as extending the useful life of the asset and/or increasing the capacity of the asset. These kinds of expenditures must be capitalized. Capitalization means recording as an asset. In this context, if an expenditure extends the useful life and/or increases the capacity of an asset, it must be added to the cost of the related asset. The correct answer is B.

Yanıt Açıklaması: funds to borrow. In case of borrowings with high amounts, companies prefer longer maturities, so that it is expected to be easier to pay the loan back and protect the liquidity of company at the same time. Companies pay these loans in installments, which include some part of principal and accrued interest together. Therefore, even long-term borrowings have repayment obligations in short term. In other words, some part of the long-term loan matures within one year (or operating cycle length) as of balance sheet date. This part to be paid in the next financial statement term is classified as Current Portion of Long Term Loan. The correct answer is B.

Yanıt Açıklaması: They are reported under non-current assets section of balance sheet. Other statements are true for intangible assets.

Yanıt Açıklaması: Depreciation does not create funds. It provides the cost of the asset to be distributed by distributing it to periods.