True or False:

Write true if the statement is true and false if the statement is wrong.
_TRUE__ 1. In an installment basis where the cash price is not available, the cost of the asset
is equal to the present value of all payments using an implied interest rate.
_TRUE__ 2. In an instalment basis where the cash price is available, the difference between the
face value of the note and the present value of the note is regarded as interest expense
amortized by the effective interest method over the credit period.
_FALSE_ 3. Extraordinary repairs are expensed as incurred.
_FALSE_ 4. When land and building are purchased at a single cost, and the building is usable,
the cost is allocated between land and building on the basis of their carrying value.
_FALSE_ 5.Ventilating system, lighting system, elevator if installed during construction, it is
charged to the building improvements account.
_FALSE_ 6. When land and building are purchased at a single cost, whether the building is
usable or not, the full cost is charged to land.
_TRUE__ 7. Movable building fixtures are charged to furniture and fixtures.
_FALSE_ 8. If part of the blueprint, sidewalks, pavements, parking lot, driveways should be
charged to building.
_FALSE_ 9. Any expenses in relation to the donated asset is charged or deducted from the
donated asset.
_TRUE__10. Exchange involves a significant amount of cash and involves a non- dealer
acquiring the asset from a dealer.
_TRUE_ 11. Cost of testing whether the asset is functioning properly, after deducting the net
proceeds from selling any items produced while bringing the asset to that location and condition
is an example of capitalizable cost of the property, plant and equipment.
_FALSE_12. Cost of introducing a new product or service and the cost of opening a new facility
are costs that are capitalizable for property, plant and equipment.
_TRUE_ 13. Depreciation is no longer provided if the fair value of the asset exceeds its carrying
amounts and the asset’s residual value does not exceed its carrying amount.
_FALSE_ 14. Depreciation of an asset continues for a property that is classified as held for sale.
_TRUE_ 15. Depreciation is provided for an item of property that is idle, or retired from active
use unless it is fully depreciated.