1.A company should use the depreciation method that best matches depreciation expense against the revenues produced by the asset.
True
False
2.Depreciation
a.is the allocation of plant asset's cost to expense over its useful life
b.matches the expense against the revenue generated from using the asset to measure net income
c.Both a and b
d.None of the above
3.The cost of land is depreciated.
True
False
4.An asset's estimated useful life is the length of the service period expected from the asset.
True
False
5.Capital expenditures:
a.increase the asset's capacity or efficiency
b.extend the asset's useful life
c.Both a and b
d.None of the above
6.The cost of a plant asset is its purchase price only.
True
False
7.Short term notes payable are promissory notes that must be paid over time.
True
False
8.Most long-term notes payable are paid in installments. The current portion of notes payable is the principal amount that will be paid within one year.
True
False
9.Sales tax payable is a current liability because the retailer must pay the state in less than a year.
True
False
10.Accrue liabilities also referred to as an accrued expense, is any expense that has been incurred and paid.
True
False
11.Accounts payable represent amounts owed for products or services purchased on account.
True
False