1. In the journal entry to decrease the carrying value of natural resources, the depletion amount is at

A. Credit to the accumulated depletion account or the natural resource account

B. Credit to the accumulated depletion account and the natural resource account

C. Credit to the accumulated depletion account, but cannot be a credit to the natural resource account

D. Credit to the Natural Resource account, but cannot be a credit to the accumulated depletion account

2. Which of the following would have an effect on the presentation of past years' comparable financial statements?

A. A component operation of the company is discontinued

B. Revising the estimated life of equipment

C. Correcting an error due to improper revenue recognition

D. Impairment of Goodwill

E. Using MACRS to compute the depreciation of an asset for tax purposes

3. Liabilities resulting from purchase of property, plant, and equipment should be:

A. Reported in the liabilities section of the balance sheet

B. Presented as contra accounts to the related noncurrent asset

C. Disclosed net of tax in current or noncurrent liabilities, based on estimated timing of payment(s)

D. Direct reductions in the recorded cost of the property, plant, and equipment