FREE Robert Half Accounting Questions and Answers

Question 1

The price of research and development.

Accepted Answer

In accordance with generally accepted accounting principles, must be expensed as incurred

Answer

Under Generally Accepted Accounting Principles (GAAP), research and development (R&D) costs are generally required to be expensed in the period they are incurred. This is due to the inherent uncertainty regarding the future economic benefits of R&D activities. While R&D can lead to valuable assets like patents, the costs themselves are not capitalized as intangible assets until specific criteria for technological feasibility are met, which is rare for R&D itself.

Question 2

On the balance sheet, trademarks are often listed.

Accepted Answer

Intangibles

Answer

Trademarks are considered intangible assets because they lack physical substance but possess economic value to a company. They represent legal rights that provide exclusive use of a brand name or logo. On the balance sheet, intangible assets like trademarks are typically listed separately from tangible assets such as property, plant, and equipment.

Question 3

Allocating a plant asset's cost throughout its useful life is called depreciation (n).

Accepted Answer

Systematic and rational manner

Answer

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life. This allocation must be done in a systematic and rational manner, meaning there's a logical and consistent method (like straight-line or declining balance) used to spread the cost. The goal is to match the expense of the asset with the revenues it helps generate over its service period, not to reflect market value changes.

Question 4

A long-term asset's cost is expensed.

Accepted Answer

As the asset benefits the company

Answer

The matching principle in accounting dictates that expenses should be recognized in the same period as the revenues they help generate. For long-term assets, their cost is expensed through depreciation (or amortization for intangibles) over their useful life, reflecting the periods in which the asset provides economic benefits to the company. This ensures that the financial statements accurately portray the company's profitability.

Question 5

The process of depreciation.

Accepted Answer

Cost allocation

Answer

Depreciation is fundamentally a process of cost allocation, not asset valuation. It systematically distributes the historical cost of a tangible asset, less any salvage value, over its estimated useful life. The purpose is to match the expense of using the asset with the revenues it helps produce, rather than to reflect the asset's current market value.

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Practice Test

FREE Robert Half Accounting Questions and Answers