24 Questions
Which of the following is true about property, plant, and equipment?
It is a tangible non-current asset
What is the purpose of depreciation?
To allocate the depreciable amount of an asset over its useful life
When should property, plant, and equipment be derecognized?
When it is no longer being used
Which of the following is a requirement for recognizing property, plant, and equipment as an asset?
It must yield future economic benefits
What is the revaluation model for property, plant, and equipment?
It involves measuring the asset at fair value
What is the purpose of residual values and lengths of useful lives review?
To allocate the depreciable amount of an asset over its useful life
What is the cost model for investment property?
It involves measuring the asset at cost
Which of the following is true about investment property?
It is held for the purpose of earning rental income or for capital appreciation or both
What is the treatment for borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset?
They must be recognized as an asset
What is the treatment for government grants relating to the acquisition of an asset?
They must be recognized as revenue
What is the purpose of recognizing revaluation gains and losses for property, plant, and equipment?
To reflect changes in the fair value of an asset
What is the purpose of choosing a depreciation method?
To allocate the depreciable amount of an asset over its useful life
Which of the following is a requirement for recognizing property, plant, and equipment as an asset?
It must be held for use in the production or supply of goods or services
When should property, plant, and equipment be derecognized?
When no future economic benefits are expected from it
What is the purpose of depreciation?
To allocate the depreciable amount of an asset over its useful life
What are the two models an entity may apply to measure investment property?
The cost model and the fair value model
When should borrowing costs be capitalized as part of the cost of a qualifying asset?
When they are directly attributable to the acquisition, construction or production of a qualifying asset
When should revaluation gains be credited to a revaluation reserve?
When an entity applies the revaluation model
What is the definition of property, plant and equipment?
Tangible non-current assets held for use in the production or supply of goods or services, or for rental to others or for administrative purposes
What should an entity do to choose the best depreciation method for an asset?
Choose a method that best matches the usage pattern of the asset concerned
How should government grants relating to the acquisition of an asset be recognized?
As income over the useful life of that asset
What are the two models an entity may apply to measure property, plant, and equipment?
The cost model and the revaluation model
What are the types of economic benefits that property, plant, and equipment may yield?
Capital appreciation and rental income
What should an entity do with other borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset?
They should be recognized as an expense
Test your knowledge on property, plant and equipment accounting with this quiz! Learn about the criteria for recognising and derecognising these assets and their significance in the production, supply, and rental of goods and services. Use keywords like tangible non-current assets, future economic benefits, and reliable cost measurement to ace this quiz!
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