homework 1 by xiaoyounan

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									1.
The depreciation system used by many businesses for tax purposes is the
     A)   Accelerated Cost Recovery System.
     B)   Modified Adjusted Cost Recovery System.
     C)   Modified Actual Cost Recovery System.
     D)   Modified Accelerated Cost Recovery System.

Points Earned: 5.0/5.0




2.
The adjusting entry for the depreciation of office equipment for the period includes
   A) debiting Depreciation Expense--Office Equipment and crediting Office
Equipment.
   B) debiting Office Equipment and crediting Accumulated Depreciation--Office
Equipment.
     C)
      debiting Depreciation Expense--Office Equipment and crediting Accumulated
Depreciation--Office Equipment.
   D) debiting Office Equipment and crediting Depreciation Expense--Office
Equipment.

Points Earned: 0.0/5.0




3.
If the debits in the Income Statement columns of the work sheet total $50,000 and the
credits total $60,000 before net income or net loss has been determined, the business has
a net income of $10,000.
     A) True

     B) False

Points Earned: 5.0/5.0




4.
The ____________________ is a form used to pull together all of the information needed
to enter adjusting entries and prepare the financial statements.
     w ork sheet

Points Earned: 5.0/5.0




5.
The only correct way to change the balance of a ledger account is to make a journal entry.
        A) True

        B) False

Points Earned: 5.0/5.0




6.
The original cost of an asset less the trade-in or salvage value of an asset equals the
depreciable cost of that asset.
        A) True

        B) False

Points Earned: 5.0/5.0




7.
A computer workstation cost $28,000, has an expected life of 7 years, and an expected
salvage value of $7,000. Depreciation expense using the straight-line method will be
$3,000 per year.
        A) True

        B) False

Points Earned: 5.0/5.0




8.
The period of time that an asset is expected to help produce revenues is called its
____________________.

     useful life

Points Earned: 5.0/5.0
9.
If the total credits exceed total debits in the Income Statement columns of the work sheet,
the business has had a net loss.
      A) True

      B) False

Points Earned: 0.0/5.0




10.
An asset cost $33,000. It has an expected useful life of 5 years and an expected salvage
value of $3,000. Depreciation expense for the first year of the asset's life using the
straight line method is
      A)   $6,000.
      B)   $6,600.
      C)   $10,000.
      D)   $13,200.

Points Earned: 5.0/5.0




11.
The cash basis of accounting and the accrual basis of accounting result in the same
measures of net income.
      A) True

      B) False

Points Earned: 5.0/5.0




12.
The net income or loss for the year can be found on the work sheet as the balance item at
the bottom of either the Balance Sheet columns or the Income Statement columns.
      A) True

      B) False

Points Earned: 5.0/5.0




13.
The income statement reports earnings on a specific date.
      A) True

      B) False

Points Earned: 5.0/5.0




14.
The amount of depreciation taken each period will be the same using the straight-line
method.
      A) True

      B) False

Points Earned: 5.0/5.0




15.
While certain distinctive problems may arise in keeping the accounts of any specific
enterprise, the principles of accounting on the cash basis are generally the same.
      A) True

      B) False

Points Earned: 0.0/5.0




16.
The book value of a plant asset is determined by subtracting the accumulated
depreciation from the cost of the plant asset.
      A) True

      B) False

Points Earned: 5.0/5.0




17.
The cost of an asset that is subject to depreciation is called
      A)   salvage value.
      B)   depreciable cost.
      C)   revenue.
      D)   trade-in value.

Points Earned: 5.0/5.0




18.
The 10-column work sheet is used to facilitate the preparation of the income statement,
the statement of owner's equity, and the balance sheet.
      A) True

      B) False

Points Earned: 0.0/5.0




19.
When assets are recorded at original value, they are recorded under the
      A)   historical cost principle.
      B)   original principle.
      C)   current principle.
      D)   value principle.

Points Earned: 5.0/5.0




20.
The matching principle offers the best measure of net income.
    A) True

    B) False

Points Earned: 5.0/5.0



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