Question 1 cost allocation of an intangible asset is referred to as
Question 1 Cost allocation of an intangible asset is referred to as
Question 2 All of the following statements are false regarding depreciation except
depreciation is an asset valuation process.
depreciation does not apply to land improvements.
recognizing depreciation results in the accumulation of cash for asset replacement.
depreciation does not apply to land.
Question 3 Short-term notes receivable
have a related allowance account called Allowance for Doubtful Notes Receivable.
are reported at their gross realizable value.
use the same estimations and computations as accounts receivable to determine cash realizable value.
present the same valuation problems as long-term notes receivables.
Question 4 The matching rule relates to credit losses by stating that bad debt expense should be recorded
in the same period as allowed for tax purposes.
in the period of the sale.
for an exact amount.
in the period of the loss.
Question 5 A note receivable is a negotiable instrument which
eliminates the need for a bad debts allowance.
can be transferred to another party by endorsement.
takes the place of checks in a business firm.
can only be collected by a bank.
Question 6 Allowing only the treasurer to sign checks is an example of
separation of duties.
establishment of responsibility.
Question 7 All of the following requirements about internal controls were enacted under the Sarbanes-Oxley Act of 2002 except:
independent outside auditors must attest to the level of internal control.
companies must develop sound internal controls over financial reporting.
companies must continually assess the functionality of internal controls.
independent outside auditors must eliminate redundant internal control.
Question 8 Each of the following is a feature of internal control except
an extensive marketing plan.
bonding of employees.
separation of duties.
recording of all transactions.
Question 9 Equipment with a cost of $256,000 has an estimated salvage value of $24,000 and an estimated life of 4 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?
Question 10 Mitchell Corporation bought equipment on January 1, 2012 .The equipment cost $120,000 and had an expected salvage value of $20,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is