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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
False
B
True
2) A(n) ________ is something you own that has economic value.
A
net worth
B
depreciation
C
asset
D
historical cost
3) Cash, as well as checking and savings accounts, are examples of
A
fixed assets
B
restricted assets
C
liquid assets
D
tangible assets
4) The price you pay for an asset at the time of purchase is the
A
replacement cost
B
depreciation
C
operating cost
D
historical cost
5) ________ is what you would pay to buy a newer version of the same asset.
A
Operating cost
B
Depreciation
C
Replacement cost
D
Salvage value
6) ________ is the decrease in an asset's value over the lifetime of the asset caused by wear and tear.
A
Operating cost
B
Salvage value
C
Replacement cost
D
Depreciation
7) ________ are typical operating costs for a car.
A
Sticker prices
B
Stop lights
C
Property taxes
D
Repairs and maintenance
8) Depreciation is calculated by
A
subtracting salvage value from the historical cost and then dividing by the life of the asset
B
subtracting the lifetime of the asset from the historical cost and then multiplying by the salvage value
C
subtracting historical cost from salvage value and then dividing by the age of the asset
D
adding the salvage value to the historical cost and then dividing by the age of the asset
9) By selling a piece of land for cash, you are turning
A
a liquid asset into another liquid asset
B
a fixed asset into a liquid asset
C
a tangible asset into a fixed asset
D
a restricted 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
Using your savings to buy your first computer
C
Selling a motor scooter and putting the money in the bank
D
Transferring money from a savings account to a 401(k)
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
$25.00
B
$17.50
C
$7.50
D
$32.50
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
$12.00
C
$7.50
D
$19.50
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
$0.00
B
$5,000.00
C
$20,000.00
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
$10,000.00
B
$400
C
$640
D
$460
15) One example of exchanging a liquid asset for a fixed asset is
A
using cash to buy real estate
B
selling a car for cash
C
selling real estate to pay for college tuition
D
using a check to pay for a new computer
*select an answer for all questions
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