1. If a company determines cost of goods sold only at the end of the period after taking a physical inventory, it

		A.uses a combination of the perpetual and periodic inventory systems.
		B. has better control over inventories.
		C. uses a perpetual inventory system.
		D. uses a periodic inventory system.

2. Which of the following are classified as other receivables?

		A.notes receivable from the sale of merchandise.
		B. salary advances to employees.
		C. notes payable.
		D. trade receivables.

3. Which of the following statements about depreciation is false?

		A. Recording depreciation in each period is an application of the expense recognition (matching) principle.
		B. Depreciation is a process of asset valuation, not cost allocation.
		C. Depreciation is required because of wear-and-tear and technological obsolescence.
		D. The balance in accumulated depreciation represents the total cost that has been charged to expense since placing an asset in service.3

4. When a company using the allowance method writes off an account receivable:

		A. the write off affects both the income statement and the balance sheet.
		B. the company incurs a loss or expense in the period of the write off.
		C. the company it is prohibited by law from attempting to collect from the customer.
		D. the net (cash) realizable value of accounts receivable remains the same as before the write off.

5. The cost of land would not include

		A. costs to clear the land (to make it ready for construction of a new building)
		B. accrued property taxes assumed by the purchaser.
		C. annual property taxes incurred after the land was purchased.
		D. real estate brokers' commission.