1. The cost of an asset less accumulated depreciation equals:
A. residual value.
B. book value.
C. depreciation expense.
D. None of these answers are correct.
2. Kevin purchased a truck for $30,000 with a residual value of $6,000 and a life expectancy of 4 years; using straight-line depreciation, the amount of the depreciation adjustment for the first year would be:
A. $5,000
B. $6,000
C. $6,400
D. $4,000
3. Accumulated Depreciation is found on which of the following financial statements?
A. Balance sheet
B. Income statement
C. Statement of Owner's Equity
D. All of these answers are correct.
4. On November 1, Jennifer paid $12,000 in advance for a year’s rent. The December 31 adjusting entry for rent expense should include a:
A. debit Rent Expense, $10,000.
B. credit Prepaid Rent, $10,000
C. debit Rent Expense, $2,000.
D. credit Cash, $10,000.