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Test # 1 (Ch 10 and Ch 11) Multiple Choice (75/25 3 points) 1.The debit for a sales tax properly levied and paid on the purchase of machinery preferabl be a charge to a. the machinery account. b, a separate deferred charge account. c. miscellaneous tax expense (which includes all taxes other than those on income). d. accumulated depreciation-machinery. 2.Which of the following costs are capitalized for self-constructed assets? a. Materials and labor only b. Labor and overhead only c. Materials and overhead only d. Materials, labor, and overhead 3.When computing the amount of interest cost to be capitalized, the concept of 'avoidable interest" refers to a the total interest cost actually incurred. b. a cost of capital charge for stockholders' equity. that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made. that portion of weighted-average accumulated expenditures on which no interest cost was incurred. -c. d. 4 When a company is the recipient of a donated asset, the account credited may be a a. paid-in capital account. b. revenue account c. deferred revenue account. d. All of these answers are correct. 5.Which of the following is not a capital expenditure? a. Repairs that maintain an asset in operating condition b. An addition c. A betterment d. A replacement 6.Mendenhall Corporation constructed a building at a cost of $14,000,000. Weighted-average accumulated expenditures were $5,600,000, actual interest was $560,000, and avoidable interest was $280,000. If the salvage value is $1,120,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-ine method is a. $329,000. b. $336,000. C. $357,000. d. $469,000

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