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Intermediate Accounting II - D104 WGU
actual practice test
1. Which method should be used to handle indirect costs of self-
constructed
assets?
Assigning no variable overhead to a constructed asset
Allocating overhead on the basis of gained production
Assigning a pro rata portion of all overhead to the
asset
Allocating
the
total
overhead
to
the
asset:
Assigning a pro rata portion of all overhead
to the asset
2.
A company purchases land for development into a subdivision.
The land has a factory building on it that will need to be
demolished.
Where should the interest costs be
allocated? Interest expenses
General administrative expenses
Cost of the land
Cost of the plant: Cost of land
3.
In which situation can capitalization of interest be included
in the cost of land?
When holding the land as an investment
When purchasing land with the intension of developing it for
lots sales When selling the land
When building a structure on the land: When purchasing land with the intension of
developing it
for lots sales
4.
Which value should be used to record machinery that was
purchased with a long-term note?
Sum of all estimated payments
