Deck 9: Long-Lived Tangible and Intangible Assets

Question 1

The Buddy Burger Corporation has $3.5 million in long-lived assets and has an accumulated amortization account of $1.1 million.Which of the following statements is true?

A)The book value of long-lived assets is $2.4 million.
B)The market value of long-lived assets is $3.5 million.
C)The carrying value of long-lived assets is $3.5 million.
D)The resale value of long-lived assets is $2.4 million.

Answer 1

The book value of long-lived assets is $2.4 million.

Question 2

Which of McGraw-Hill's intangible assets gives it the legal right to prevent you from borrowing a textbook from a friend and photocopying all of it?

A)Patent
B)Trademark
C)Franchise agreement
D)Copyright

Answer 2

Copyright

Question 3

Match the term and the explanation.Not all explanations will be used. _____ Long-lived assets
_____ Average net fixed assets
_____ Capitalization of cost
_____ Units-of-production method
_____ Carrying value
_____ Asset impairment loss
_____ Amortization
_____ Net sales revenue
_____ Declining-balance method

A)The average proportion of a company's total assets that is long-lived.
B)An amortization method that produces higher amounts of amortization expense in the early years of an asset's life and lower amounts in the later years.
C)The cost of financing an asset.
D)Also known as book value.
E)Assets that will be used for more than three years.
F)The denominator of the fixed asset turnover ratio.
G)Also known as the average total cost of production.
H)How expenses are reported in the income statement.
I)An amortization method that spreads asset cost by production rather than time.
J)Also known as the initial value or balance forward value.
K)Assets that will be used for more than a year.
L)The process of transferring the cost of long-lived tangible assets to expenses.
M)When a company writes down the value of an asset when estimated future cash flows fall below the original level estimated.
N)The numerator of the fixed asset turnover ratio.
O)When costs are recorded as assets rather than expenses.
P)When a company writes down the value of an asset because estimated future cash flows fall below the book value.

Answer 3

The cost of financing an asset.

Question 4

A company paid $500,000 to purchase equipment and $15,000 to have the equipment delivered to and installed in the company's production facilities.Commercial use of the equipment began on May 1,2009.The estimated residual value of the equipment is $5,000.The equipment is expected to be used a total of 28,000 hours throughout its estimated useful life of six years.The company has an October 31,year-end and had used the equipment a total of 11,200 hours prior to the year-end.Using the units-of-production method,what amount of amortization expense (to the nearest thousand)would the company report for this equipment in the income statement prepared for the year ended October 31,2009?

A)$102,000
B)$198,000
C)$204,000
D)$206,000

Question 5

Under the cost principle:

A)only reasonable and necessary costs of acquiring an asset should be recorded as a cost of the asset.
B)costs of preparing an asset for use should never be recorded as part of the cost of the asset.
C)all reasonable and necessary costs of acquiring an asset and preparing it for use should be recorded as a cost of the asset.
D)only the actual purchase price of the asset is recorded as the cost of the asset.

Question 6

IBM's website is an example of a:

A)patented intangible asset.
B)technology intangible asset.
C)current tangible asset.
D)copyright tangible asset.

Question 7

The MegaHit Film Studio has a licensing right (or agreement)to distribute films produced by the Artsy Film Company.How would the MegaHit Company classify this licensing right on its balance sheet?

A)Tangible asset
B)Intellectual property asset
C)Intangible asset
D)Nonreported asset

Question 8

The MegaHit Film Studio owns a production lot and related equipment.How would MegaHit Company classify these assets on its balance sheet?

A)Tangible asset
B)Other long-lived asset
C)Intangible asset
D)Nonreported asset

Question 9

Ordinary repairs and maintenance always:

A)are part of the asset cost of equipment and facilities.
B)are recorded as expenses.
C)are recorded as liabilities.
D)improve the asset beyond the current accounting period.

Question 10

ABC Co.purchased land and building at a price of $480,000.ABC also incurred a real estate broker's fee of $5,000 and legal fees of $2,000 to complete the purchase.ABC paid $3,000 to obtain a real estate appraisal prior to the purchase.The appraisal indicated that,valued separately,the land was worth $260,000 and the building was worth $240,000.The land should be recorded in the accounting records for:

A)$249,600.
B)$253,240.
C)$254,800.
D)$259,600.

Question 11

A real estate management company buys an apartment complex for $4.8 million.An appraiser values the land at $1.1 million,the building at $3.4 million,and the equipment at $0.3 million.In addition,the company pays a 5% commission to a broker for arranging the sale.Which of the following statements is true?

A)The company would record $3.57 million as the acquisition cost of the building.
B)The company would record $1.1 million as the acquisition cost of the land.
C)The company would record $3.7 million as the acquisition cost of the building.
D)The company would record $0.24 million as an expense and $4.8 million as an asset.

Question 12

Which of the following statements is true?

A)Long-lived tangible assets will not be used up within one year,but there is no minimum useful life for long-lived intangible assets.
B)Items in a company's inventory that are not expected to be sold in the next year are considered long-lived assets.
C)All long-lived intangible assets must be expensed over a period of 40 years or less.
D)Intangible assets with unlimited or indefinite lives are not amortized.

Question 13

Which of the following is not an amount that is needed to calculate straight-line amortization?

A)The cost of the asset.
B)An estimate of the asset's useful economic life to the company.
C)The amount that the company will get when it disposes of the asset.
D)The cost the company will be required to incur to replace the asset.

Question 14

Your company buys a computer system from IBM for $3 million and pays IBM $200,000 to install the computer system.Your company should record:

A)$3 million in equipment and $200,000 in expenses.
B)$3.2 million in expenses.
C)$2.8 million in equipment and the rest in expenses.
D)$3.2 million in equipment.

Question 15

How will the costs of an intangible asset being develop internally or self-constructed be reported?

A)As capital expenditure
B)As research and development expenses
C)As marketing expenses
D)As a liability

Question 16

If a company capitalizes costs that should be expensed,how is its income statement for current period impacted?

A)Net income will be lower than it should be.
B)Revenues will be lower than they should be.
C)Expenses will be lower than they should be.
D)Assets will be lower than they should be.

Question 17

The main difference between ordinary repairs and extraordinary repairs is:

A)ordinary repairs cost less.
B)ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an asset economic usefulness in the future through increased efficiency,capacity,or longer life.
C)extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition.
D)extraordinary repairs are expenses,not expenditures.

Question 18

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation.One-half of the total cost is paid in cash; the other half is financed.How should the company record this transaction?

A)Debit cash for $250,000,debit notes payable for $250,000,and credit equipment for $500,000.
B)Debit equipment for $500,000,credit cash for $250,000,and credit notes payable for $250,000.
C)Debit cash for $250,000,debit notes payable for $250,000 credit equipment for $450,000,and credit expenses for $50,000.
D)Debit equipment for $450,000,debit expenses for $50,000,credit cash for $250,000,and credit notes payable for $250,000.

Question 19

The intangible asset most frequently reported by Canadian businesses is:

A)goodwill.
B)trademarks.
C)patents.
D)licensing rights.

Question 20

When a company records amortization expense it debits:

A)liabilities and credits expenses.
B)expenses and credits cash.
C)expenses and credits a contra-asset account.
D)long-lived assets and credits expenses.

Question 21

Which of the following statements most appropriately describes the purpose of amortization of a long-lived tangible asset?

A)To indicate how the asset has physically deteriorated.
B)To show that the asset will eventually and gradually become obsolete.
C)To record that the asset's market value declines over time.
D)To match the cost of the asset to the period in which it generates revenue.

Question 22

After the early years of an asset's life,accelerated amortization methods:

A)cause an asset to be carried at a higher book value than the straight-line method.
B)cause an asset to be carried at a lower book value than the straight-line method.
C)cause an asset to be carried at the same book value as the straight-line method.
D)cannot be used if the resulting book value will be significantly different from that which would result from using the straight-line method.

Question 23

?

A)$21,600
B)$22,000
C)$22,400
D)$34,000

Question 24

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The residual value of the facility is:

A)$117,000.
B)$151,000.
C)$268,000.
D)$107,000

Question 25

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization expense for this period is:

A)$80,000.
B)$400,000.
C)$76,000.
D)$380,000.

Question 26

The book or carrying value of an asset is:

A)its acquisition cost less the accumulated amortization from the acquisition date to the balance sheet date.
B)its acquisition cost plus accumulated amortization from the acquisition date to the balance sheet date.
C)the amount that could be obtained for the asset on the balance sheet date if it were sold.
D)the annual cost of carrying the asset in inventory.

Question 27

What is the amortization expense for 2009?

A)$4,000.
B)$3,000.
C)$6,000.
D)$8,000.

Question 28

A company expects to use equipment that cost $48,000 for ten years and then sell it for $6,000.Using the straight-line method,the company should report amortization for the equipment of:

A)$4,200 per year.
B)$8,400 per year.
C)$4,800 per year.
D)$9,600 per year.

Question 29

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

A)$117,000.
B)$151,000.
C)$268,000.
D)$107,000

Question 30

A company buys a piece of equipment for $48,000.The equipment has a useful life of ten years.Using the double-declining-balance method,the company's amortization expense in the first year would be:

A)$9,600.
B)$12,000.
C)$4,800.
D)$24,000.

Question 31

Your company buys a computer server,which it expects to use for eight years and then sell when it upgrades to a more powerful model.The server would probably be used by the business that buys it at that time for another three years.The useful life of the server for your company is:

A)the total length of time the server is used to produce output for your company.
B)eleven years.
C)the total length of time until the server can no longer function.
D)three years.

Question 32

ShadyZ Corporation uses the unit-of-production method to estimate amortization.A new asset is purchased for $18,000 that will produce an estimated 100,000 units over its useful life.Estimated residual value is $2,000.What is the amortization rate per unit?

A)$1.60
B)$1.80
C)$0.16
D)$0.18

Question 33

A piece of equipment was acquired on January 1,2009,at a cost of $22,000,with an estimated residual value of $2,000 and an estimated useful life of four years.The company uses the double-declining-balance method.What is its book value at December 31,2010?

A)$5,500
B)$10,000
C)$11,000
D)$12,000

Question 34

One difference between the double-declining-balance method and the straight-line method is that the double-declining-balance method:

A)takes book value below residual value.
B)does not consider the useful life of the asset in the calculation of amortization.
C)cannot be used for tax purposes.
D)uses book value instead of depreciable cost in the calculation of amortization.

Question 35

Paul Hauling has a fleet of 10 large trucks that cost a total of $1,410,000.The fleet is expected to provide 1,000,000 miles of transportation during an estimated 10-year life,and be sold for 10% of the original cost at the end of that time.If the fleet traveled 125,000 miles in the current twelve-month period,what would be the amortization expense under the straight-line (SL)and units-of-production (UoP)methods?

A)SL = $158,625 & UoP = $141,000
B)SL = $141,000 & UoP = $158,625
C)SL = $126,900 & UoP = $176,250
D)SL = $126,900 & UoP = $158,625

Question 36

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

A)$0.95 per unit.
B)$0.19 per unit.
C)$0.05 per unit.
D)$1.00 per unit.

Question 37

If the double-declining balance method were used to amortize a building that has a 10-year useful life and a residual value equal to 10% of the building's original cost,what amortization rate would be used?

A)9%
B)10%
C)18%
D)20%

Question 38

What is the adjusted balance in the Accumulated amortization account at the end of 2010?

A)$3,200
B)$4,800
C)$9,600.
D)$12,800.

Question 39

Which of the following statements is true when the straight-line method is used to compute amortization?

A)The carrying value of an asset is a constant amount during the asset's useful life.
B)Accumulated amortization is a constant amount during the asset's estimated useful life.
C)Amortization expense per period is the amortizable cost divided by the number of periods in the asset's useful life.
D)None of the above.

Question 40

A company bought a piece of equipment for $40,000,expecting to use it for eight years.The company then plans to sell it for $3,500.The company has already recorded amortization of $35,995.Using the double-declining-balance method,the company's annual amortization expense for the upcoming year would be:

A)$1,001.
B)$9,125.
C)$505.
D)$10,000.

Question 41

Your company rents out computers to local businesses and schools.You have 1,000 computers with a net book value of $160,000.As a result of changing technology,your computers are more difficult to rent so you must severely reduce your rental price,which causes a decrease in estimated future cash flows.The fair value of the computers is estimated to be $125,000 because of their outmoded technology.Your company should report an asset impairment loss of:

A)$160,000.
B)$125,000.
C)$35,000.
D)none of the above.

Question 42

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

A)amortization expense for $40,000 and credit long-lived assets for $40,000.
B)accumulated amortization for $40,000 and credit cash for $40,000.
C)amortization expense for $20,000 and credit accumulated amortization for $20,000.
D)cash for $20,000 and credit amortization expense for $20,000.

Question 43

Your company pays $620,000 for a patent that has 10 years remaining.Each year,your company should:

A)debit amortization expense for $62,000 and credit accumulated amortization for $62,000.
B)debit intangible assets and credit accumulated amortization for an amount equal to 20% of book value.
C)debit amortization expense for $31,000 and credit intangible assets for $31,000.
D)report no amortization expense because patents are not subject to amortization.

Question 44

When a company determines that estimated future cash flows from an asset are different from the book value of the asset,it records:

A)an asset impairment gain,if the value of the cash flows exceeds the asset's book value.
B)an asset impairment loss,if the value of the cash flows exceeds the asset's book value.
C)an asset impairment gain,if the asset's book value exceeds the value of the cash flows.
D)an asset impairment loss,if the asset's book value exceeds the value of the cash flows.

Question 45

When a company sells a long-lived asset,shareholders' equity will change by the:

A)amount of the sale.
B)amount of the asset's book value.
C)amount of the asset's accumulated amortization.
D)difference between the sale price and the asset's book value.

Question 46

,the company sold the vehicle for $6,000 and reported a loss on disposal of $3,480.What method of amortization did the company use?

A)Units-of-production method
B)Double-declining-balance method
C)Straight-line method
D)None of the above

Question 47

How does an asset impairment loss impact a company's financial statements?

A)Raise expenses and lower both revenue and net income.
B)Lower assets,shareholders' equity,and net income.
C)Raise expenses and lower net income with no effect on any other items.
D)Raise liabilities and lower shareholders' equity.

Question 48

In recording the acquisition cost of an entire business:

A)goodwill is recorded as the excess of cost over the fair market value of identifiable net assets.
B)assets are recorded at the seller's book values.
C)goodwill,if it exists,is never recorded.
D)goodwill is recorded as the excess of cost over the book value of identifiable net assets.

Question 49

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

A)the price for which it could be sold.
B)its acquisition cost or current market value,whichever is lower.
C)its purchase price minus accumulated amortization.
D)its purchase price adjusted for inflation.

Question 50

Goodwill:

A)should be treated like most other intangible assets and amortized over a useful life of not more than 40 years.
B)is an accounting measurement of how well a company's employees behave towards the company's customers.
C)should be recorded as a negative value if a company is purchased for less than the net carrying value of its assets.
D)is recorded when the purchasers of a business pay more than the fair market value of the assets purchased.

Question 51

Under what circumstance should a company record an asset impairment loss?

A)When residual value is greater than the repairs and maintenance expenses needed to keep the asset.
B)When net book value is less than the residual value of the asset.
C)When accumulated amortization equals the purchase cost of the asset.
D)When net book value is greater than expected future cash flows for the asset.

Question 52

A truck costing $12,000 and on which $9,000 of accumulated amortization has been recorded was disposed of for $2,000 cash.The entry to record this event would include a:

A)gain of $1,000.
B)loss of $1,000.
C)credit to the Truck account for $3,000.
D)credit to Accumulated amortization for $9,000.

Question 53

A loss on disposal of an asset is reported:

A)in the Other Revenues section of the income statement.
B)in the Other Expenses section of the income statement.
C)as a direct increase to the asset account on the balance sheet.
D)as a direct decrease to the asset account on the balance sheet.

Question 54

When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:

A)amortization expense for the entire accounting period during which the equipment is sold.
B)the disposal by reducing equipment and increasing revenue; a gain or loss is reported if the decrease and increase are not equal.
C)the disposal by decreasing both equipment and accumulated amortization while increasing cash; a gain is reported if total assets increase.
D)accumulated amortization for the entire current accounting period.

Question 55

An asset is purchased on January 1 for $40,000.It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000.The company uses the straight-line method.If it is sold for $30,000 exactly two years after its purchase,the company will record a:

A)gain of $6,000.
B)gain of $4,000.
C)loss of $4,000.
D)loss of $6,000.

Question 56

A trucking company sold its fleet of trucks for $55,000.The trucks had originally cost $1,410,000 and had accumulated amortization of $1,269,000 through the date of disposal.What gain or loss did the trucking company record when it sold the fleet of trucks?

A)Gain of $86,000.
B)Gain of $55,000.
C)Loss of $55,000.
D)Loss of $86,000.

Question 57

A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2009.The accumulated amortization account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:

A)$100,000 loss on disposal.
B)$40,000 gain on disposal.
C)$40,000 loss on disposal.
D)$25,000 loss on disposal.

Question 58

Your company pays $620,000 for a patent that has 10 years remaining.After two years,the company sells the patent for $500,000.The company should report:

A)a debit to cash of $500,000 and a credit to patents of $500,000.
B)a debit to patents of $620,000,a credit to cash of $500,000,and a credit to accumulated amortization of $120,000.
C)a debit to cash of $500,000,a debit to accumulated amortization of $124,000,a credit to patents of $620,000,and a credit to gains of $4,000.
D)a debit to patents of $496,000,a debit to losses of $4,000,and a credit to cash of $500,000.

Question 59

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

A)a gain,increasing net income and shareholders' equity.
B)revenue,increasing net income and shareholders' equity.
C)cash,increasing assets and shareholders' equity.
D)accumulated amortization,increasing assets and shareholders' equity.

Question 60

If a fully amortized asset with no residual value is retired without receiving any cash on retirement:

A)a gain on disposal will be recorded.
B)amortization must be recorded as though the asset were still on the books.
C)a loss on disposal will be recorded.
D)no gain or loss on disposal will be recorded.

Question 61

Long-lived assets are assets that are intended for resale.
BT: Knowledge

Question 62

Company A uses an accelerated amortization method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company B will show which of the following compared to Company A?

A)A smaller fixed asset turnover ratio and a smaller gain on asset disposal.
B)A larger fixed asset turnover ratio and a larger gain on asset disposal.
C)A smaller fixed asset turnover ratio and a larger gain on asset disposal.
D)A larger fixed asset turnover ratio and a smaller gain on asset disposal.

Question 63

Your company has net sales revenue of $36 million during the year.At the beginning of the year,fixed assets are $8 million.At the end of the year,fixed assets are $10 million.What is the fixed asset turnover ratio?

A)4.5
B)4.0
C)2.0
D)3.6

Question 64

Recall that the Fixed Asset Turnover Ratio equals Net Sales Revenue divided by Average Net Fixed Assets.Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

A)Caterpillar accrues and capitalizes $50,000 of interest for self-constructed assets.
B)Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000.
C)Caterpillar writes-down an impaired piece of equipment by $50,000.
D)None of the above.

Question 65

What would be the amount of amortization expense in year 2 using the units-of-production method?

A)$6,500.00
B)$5,900.00
C)$10,400.00
D)$6,555.55

Question 66

Company A uses an accelerated amortization method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company A will show which of the following compared to Company B?

A)Higher asset values and higher net income.
B)Lower asset values and higher net income.
C)Higher asset values and lower net income.
D)Lower asset values and lower net income.

Question 67

Which of the following methods would be a typical choice for assets that are most productive when they are new but lose their utility quickly as they get older?

A)Straight line method
B)Double declining method
C)Units of production method
D)Depletion

Question 68

The fixed asset turnover ratio measures the:

A)useful life of long-lived assets.
B)the average difference between book value and disposal value of fixed assets.
C)useful life of intangible assets.
D)efficiency with which the investment in fixed assets produces revenue.

Question 69

What would be the amount of amortization expense in year 2 using the straight line amortization method?

A)$6,500.00
B)$5,900.00
C)$10,400.00
D)$6,555.55

Question 70

Assuming two companies use the same accounting methods,other things being equal,the company with a higher fixed asset turnover ratio:

A)has a greater amount invested in fixed assets than a company with a lower fixed asset turnover ratio.
B)has less invested in fixed assets than a company with a lower fixed asset turnover ratio.
C)generates less sales revenue than a company with a lower fixed asset turnover ratio.
D)makes better use of its fixed assets to generate revenues than a company with a lower fixed asset turnover ratio.

Question 71

A declining fixed asset turnover ratio suggests that a:

A)company is not as efficient in using its fixed assets as it was in previous periods.
B)company's net sales must be increasing.
C)company must have purchased some intangible assets.
D)company's beginning fixed asset balance must be greater than its ending fixed asset balance.

Question 72

If net sales revenue and the average book value of fixed assets both rise 5%:

A)the fixed asset turnover ratio will rise.
B)the fixed asset turnover ratio will fall.
C)the fixed asset turnover ratio will stay the same.
D)the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown.

Question 73

Company A uses an accelerated amortization method while Company B uses the straight-line method for an asset of the same cost and useful life.Other things being equal,which of the following is true?

A)Company A will have higher net income in the early years but Company B will have higher net income towards the end of the asset's useful life.
B)Company A will consistently have the larger net income until residual value is reached.
C)Company B will have higher net income in the early years but Company A will have higher net income towards the end of the asset's useful life.
D)Company B will consistently have the larger net income until residual value is reached.

Question 74

Capitalizing costs refers to the process of converting assets to expenses.
BT: Comprehension

Question 75

If net sales revenue rises 5% while the average book value of fixed assets falls 5%:

A)the fixed asset turnover ratio will rise.
B)the fixed asset turnover ratio will fall.
C)the fixed asset turnover ratio will stay the same.
D)the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown.

Question 76

Which of the following methods would be a typical choice when asset use fluctuates significantly from period to period?

A)Straight line method
B)Double declining method
C)Units of production method
D)Depletion

Question 77

What would be the amount of amortization expense in year 2 using the double-declining-balance method of amortization?

A)$6,500.00
B)$5,900.00
C)$10,400.00
D)$6,555.55

Question 78

The company has net sales revenue of $3.6 million during 2009.The company's records also included the following information: What is the company's fixed asset turnover ratio for 2009?

A)18.00
B)1.33
C)1.00
D)1.50

Question 79

Company A uses an accelerated amortization method while Company B uses the straight-line method for an asset of the same cost and useful life.Which of the following statements is true?

A)Company A will have higher amortization expense in the early years but Company B will have the higher expense towards the end of the asset's useful life.
B)Company A will consistently have higher amortization expense until residual value is reached.
C)Company B will have higher amortization expense in the early years but Company A will have the higher expense towards the end of the asset's useful life.
D)Company B will consistently have higher amortization expense until residual value is reached.

Question 80

Another name for a tangible long-lived asset is a fixed asset.
BT: Knowledge