Question

Revenue expenditures:

Multiple Choice

• Are known as balance sheet expenditures because they relate to plant assets.

• Extend the asset's useful life.

• Substantially benefit future periods.

• Are debited to asset accounts when incurred.

• Are additional costs of plant assets that do not materially increase the asset's life or its productive capabilities.

Depreciation:

Multiple Choice

• Is the process of allocating the cost of a plant asset to expense.

• Measures the decline in market value of an asset.

• Is an outflow of cash from the use of a plant asset.

• Measures physical deterioration of an asset.

• Is applied to land.

A promissory note:

Multiple Choice

• Cannot be used in payment of an account receivable.

• Is a written promise to pay a specified amount of money at a certain date.

• Is a liability to the payee.

• Is a short-term investment for the maker.

• Is another name for an installment receivable.

When a petty cash fund is in use:

Multiple Choice

• Petty Cash is credited when funds are replenished.

• Expenses are not recorded.

• Petty Cash is debited when funds are replenished.

• Cash is debited when funds are replenished.

• Expenses paid with petty cash are recorded when the fund is replenished.

Cash, not including cash equivalents, includes:

Multiple Choice

• Money market funds.

• Customer checks, cashier checks, and money orders.

• Postage stamps.

• IOUs.

• Two-year certificates of deposit.

Answer 1

Revenue Expenditures
Answer is
Are additional costs of plant assets that do not materially increase the asset's life or its productive capabilities.

Since these costs are classified as repairs and charged to income statement

Depreciation
Answer is
Is the process of allocating the cost of a plant asset to expense.

Promissory note
Answer is
Is a written promise to pay a specified amount of money at a certain date.

When a petty cash fund is in use:
Answer is
Petty Cash is debited when funds are replenished.
i.e. more cash is transferred to petty cash

Cash, not including cash equivalents, includes:
Answer is
Customer checks, cashier checks, and money orders.