1. If an asset is determined to be impaired, it should be:

Depreciated only using the straight-line method.

Written down to its fair market value.

Reclassified as a liability.

Written up to its historical cost.

2. When making sales, the sales taxes received are:

A liability.

An expense if incurred.

A reduction in inventory value.

Revenue.

3. Which of the following is the primary objective of financial statements?

Providing managers with detailed information tailored to the managers' specific information needs

Reporting to the Internal Revenue Service the company's taxable income.

Indicating to investors in a particular company the current market values of their investments.

Providing users outside the business organization with information about the company's financial position and operating results

4. Ima Hogg Bath and Beauty Corp. has three employees. Each earns $600 per week for a five day work week ending on Friday. This month the last day of the month falls on a Wednesday. The company should make an adjusting entry:

Crediting Wage Expense for $360 and debiting Wages Payable for $360.

Debiting Wage Expense for $1,080 and crediting Wages Payable for $1,080.

Debiting Wage Expense for $360 and crediting Wages Payable for $360.

Crediting Wage Expense for $1,080 and debiting Wages Payable for $1,080