1. Recording depreciation each period is necessary in accordance with the

a. going concern principle. c. matching principle

b. cost principle. d. asset valuation principle

2. Which depreciation method is most frequently used in businesses today?

a. Straight-line

b. Declining-balance

c. Units-of-activity

d. Double-declining-balance

3. The account Allowance for Doubtful Accounts is classified as a(n)

liability.

contra account of Bad Debt Expense.

expense.

contra account to Accounts Receivable

4. A company purchased factory equipment on June 1, 2012, for $48,000. It is estimated that the equipment will have a $3,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2012, is

a. $1,875

b. $2,250

c. $2,625

d. $4, 500

5. The cash (net) realizable value of the accounts receivable at year end equals the year end balances of

a. Accounts receivable Allowance for doubtful accounts

b. Accounts receivable + Allowance for doubtful accounts

c. Credit sales + collections from credit sales

d. Total sales Allowance for doubtful accounts