1. ____ Johnson purchased equipment. The cost of installing the equipment would be a. debited to Depreciation Expense b. debited to Installation Expense c. debited to Miscellaneous Expense d. debited to the Equipment account

2. ____ Smith purchased a truck for $13,000; the salvage value was estimated to be $1,000. The truck is expected to be driven for 100,000 miles. In year one, it was driven 22,000 miles. The depreciation under Units of Activity would be: a. $2680 b. $2640 c. $3022 d. $1080

3. ____ To capitalize a cost means a. to debit an expense account b. to depreciate an asset c. to debit an asset account d. to omit the cost from consideration

4. ____ On 7/1/12 Bernie purchases Equipment with cost of $28,000, salvage value of $4,000 and life of 6 years. Under straight line depreciation, Bernie will record how much depreciation expense on 12/31/12? A. $4,000 b. $4,667 c. $8,000 d. $2,000

5. ____ Reggie purchases land for $40,000 and pays his lawyer $500 to advise him in the purchase. The $500 would be debited to: a. Legal Expense b. Miscellaneous Expense c. Land d. None of these

6. ____ Ward Inc. owns Equipment with cost of $30,000 and accumulated depreciation of $19,000. The Equipment is sold for $14,000 cash. Which of the following is true? a. Gain on Disposal will be debited for $3,000 b. Loss on Disposal will be credited for $1,000 c. Loss on Disposal will be debited for $1,000 d. Gain on Disposal will be credited for $3,000.

7. ____ Lemming acquired a building for $60,000 that is estimated to last for 20 years. Lemming depreciates the building on a straight line basis, with no salvage value. The book value of the building after 5 years will be: a. $60,000 b. $55,000 c. $45,000 d. the same as the market value of the building

8. ____ Who pays unemployment taxes? A. employee only b. employer and employee c. employer only d. neither employer nor employee

9. ____ A newly appointed payroll manager should obtain a copy of: a. Learning Payroll by Trial and Error b. Fifty Shades of Accounting c. IRS Publication 15 Circular E d. Payrollan Exciting Career Choice for the 1980s

10. ____ Nell uses double declining balance depreciation. How much depreciation should Nell record in year one on Equipment with a cost of $9,000, salvage value of $1,000 and life of 5 years? A. $1600 b. $3200 c. $1800 d. $3600

11. ____ The book value of an asset is equal to the cost minusa. the accumulated depreciation b. the salvage value c. the straight line rate d. the DDB rate

12. ____ Johnson purchases a piece of equipment with an estimated useful life of 4 years. The DDB rate for this asset would bea. 8% b. .125 c. .25 d. .50

13. ____ On which financial statement would a gain or loss be reported? A. Balance Sheet b. Income Statement c. Owners Equity Statement d. None of these

14. ____ Name two accelerated depreciation methods: a. SL and DDB b. SL and Units of Activity c. DDB and MACRS d. SL and MACRS

15. ____ Goodwill is an intangible asset that arises when: a. a company sells a really popular product b. the company wins the Presidents Award c. Mr. ONeill brings a box of Krispy Kremes to class d. one company purchases another company, paying more for it that the value of its net assets