Module 103-104 Review Part 2 Question Preview (ID: 33586)


Module 103-104 Review Part 2. TEACHERS: click here for quick copy question ID numbers.

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
c)
d)

A(n) ________ is something you own that has economic value.
a) net worth
b) asset
c) historical cost
d) depreciation

Cash, as well as checking and savings accounts, are examples of
a) fixed assets
b) tangible assets
c) liquid assets
d) restricted assets

The price you pay for an asset at the time of purchase is the
a) depreciation
b) replacement cost
c) operating cost
d) historical cost

________ is what you would pay to buy a newer version of the same asset.
a) Depreciation
b) Operating cost
c) Replacement cost
d) Salvage value

________ is the decrease in an asset's value over the lifetime of the asset caused by wear and tear.
a) Replacement cost
b) Salvage value
c) Operating cost
d) Depreciation

________ are typical operating costs for a car.
a) Property taxes
b) Stop lights
c) Repairs and maintenance
d) Sticker prices

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

By selling a piece of land for cash, you are turning
a) a restricted asset into a liquid asset
b) a liquid asset into another liquid asset
c) a tangible asset into a fixed asset
d) a fixed asset into a liquid asset

________ is an example of replacing a depreciating asset with another depreciating asset.
a) Using your savings to buy your first computer
b) Selling an old car and buying a new one
c) Selling a motor scooter and putting the money in the bank
d) Transferring money from a savings account to a 401(k)

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) $7.50
b) $17.50
c) $25.00
d) $32.50

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) $7.50
b) $12.00
c) $19.50
d) $25.00

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

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) $400
b) $460
c) $640
d) $10,000.00

One example of exchanging a liquid asset for a fixed asset is
a) using a check to pay for a new computer
b) using cash to buy real estate
c) selling real estate to pay for college tuition
d) selling a car for cash

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