1. Intangible assets have no physical existence and no life.

True

False

2. Inventories are reported on the balance sheet as a current asset.

True

False

3. The form 10-K is the annual report that publically traded companies must file with the Securities & Exchange Commission (SEC).

True

False

4. Cash received from customers may result in a current liability.

True

False

5. The issue of $1 par value common stock for $10 per share results in a $9 credit to the additional paid-in-capital account for each share issued.

True

False

6. Depreciation expense is found on the income statement while the accumulated depreciation account is found on the balance sheet.

True

False

7. If the sale of a depreciable asset such as a building or equipment results in a loss, it means that the price at which the asset was sold was:

	A.	less than the current market value.
	B.	greater than the original cost of the asset.
	C.	less than the book value of the asset at the time of sale.
	D.	greater than the book value of the asset at the time of sale.

8. Which of the following is not a current liability?

	A.	A liability due within three months for a business with a two-month operating cycle.
	B.	A liability due within one year for a business with a nine-month operating cycle.
	C.	A liability due within one year for a business with a fifteen-month operating cycle.
	D.	A liability due within fifteen months for a business with a one-year operating cycle.

9. Which of the following is incorrect?

	A.	Current liabilities impact a company's liquidity.
	B.	Working capital is equal to current assets minus current liabilities.
	C.	Liquidity is the ability of the company to meet its total obligations.
	D.	Current liabilities are those that will be satisfied within one year or the operating cycle, whichever is longer.

10. Which of the following costs associated with a land purchase is not a component of the land cost reported on a balance sheet?

	A.	The payment of delinquent property taxes.
	B.	The cost of title insurance.
	C.	The incurrence of legal fees.
	D.	The land's appraised value.