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Module 103-104 Review Part 2
Test Description: Module 103-104 Review Part 2
Instructions: Answer all questions to get your test result.
1) Cars and scooters are assets that typically lose value over time and eventually cost more to operate than they are worth.
A
True
B
False
2) A(n) ________ is something you own that has economic value.
A
historical cost
B
net worth
C
asset
D
depreciation
3) Cash, as well as checking and savings accounts, are examples of
A
tangible assets
B
liquid assets
C
fixed assets
D
restricted assets
4) The price you pay for an asset at the time of purchase is the
A
historical cost
B
operating cost
C
replacement cost
D
depreciation
5) ________ is what you would pay to buy a newer version of the same asset.
A
Depreciation
B
Operating cost
C
Salvage value
D
Replacement cost
6) ________ is the decrease in an asset's value over the lifetime of the asset caused by wear and tear.
A
Salvage value
B
Operating cost
C
Replacement cost
D
Depreciation
7) ________ are typical operating costs for a car.
A
Repairs and maintenance
B
Sticker prices
C
Property taxes
D
Stop lights
8) Depreciation is calculated by
A
adding the salvage value to the historical cost and then dividing by the age of the asset
B
subtracting salvage value from the historical cost and then dividing by the life of the asset
C
subtracting historical cost from salvage value and then dividing by the age of the asset
D
subtracting the lifetime of the asset from the historical cost and then multiplying by the salvage value
9) By selling a piece of land for cash, you are turning
A
a liquid asset into another liquid asset
B
a restricted asset into a liquid asset
C
a tangible asset into a fixed asset
D
a fixed asset into a liquid asset
10) ________ is an example of replacing a depreciating asset with another depreciating asset.
A
Selling an old car and buying a new one
B
Transferring money from a savings account to a 401(k)
C
Selling a motor scooter and putting the money in the bank
D
Using your savings to buy your first computer
11) If Carlos buys an antique watch at a junk shop for $7.50 and learns from a watchmaker that it is actually worth $25.00, his historical cost is
A
$17.50
B
$7.50
C
$32.50
D
$25.00
12) If Carlos loses his antique watch, for which he paid $7.50, and decides to buy a new one for $12.00, his replacement cost is
A
$25.00
B
$19.50
C
$7.50
D
$12.00
13) Carlos' uncle invested in real estate in 1985, paying $5,000.00 for a piece of land. Recently, he sold the land for $25,000.00. Therefore, the depreciation on the land was
A
$20,000.00
B
$5,000.00
C
$0.00
D
$25,000.00
14) Marie's father bought a used car for $10,000.00 five years ago. In another ten years, it will be worth $400.00. By how much does the car depreciate each year?
A
$460
B
$400
C
$640
D
$10,000.00
15) One example of exchanging a liquid asset for a fixed asset is
A
using cash to buy real estate
B
selling real estate to pay for college tuition
C
selling a car for cash
D
using a check to pay for a new computer
*select an answer for all questions
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