1. Which of the following statements concerning accumulated depreciation is most correct?

There is no relationship between depreciation expense on the income statement and accumulated depreciation on the balance sheet.

Accumulated depreciation appears on the balance sheet under the category "Other Assets."

None of the above statements is correct.

Net fixed assets is equal to gross fixed assets plus accumulated depreciation.

Accumulated depreciation is an income statement item.

2.

What are the three major categories of assets (select 3)

Investments

Cash

Credit

Property and Equipment

Current Assets

3.

Consider the following balance sheet: Cash $ 70,000Accounts payable $ 30,000 Accounts receivable 30,000Long-term debt 20,000 Inventories 50,000Common stock 200,000 Net fixed assets 350,000Retained earnings 250,000 Total assets $500,000Total claims $500,000 Which of the following statements is most correct?

The business is not-for-profit.

The business has a short-term bank loan outstanding.

The business is probably using too much debt financing.

The business has $450,000 in its equity accounts (common stock and retained earnings); thus, it has this much money available to spend on new facilities.

The business, in the aggregate over time, has been profitable.

4.

Consider the following balance sheet: Cash $ 70,000Accounts payable $ 30,000 Accounts receivable 30,000Long-term debt 20,000 Inventories 50,000Common stock 200,000 Net fixed assets 350,000Retained earnings 250,000 Total assets $500,000Total claims $500,000 Assume that the business uses $10,000 of its cash to pay for supplies that were ordered on credit terms and have already been received and booked (recorded on the balance sheet). Which of the below statements reflects the resulting balance sheet change?

The cash account decreases by $10,000 and the retained earnings account decreases by $10,000.

There is a change to the right-hand side only.

There is a change to the left-hand side only.

The cash account decreases by $10,000 and the supplies account increases by $10,000.

The cash account decreases by $10,000 and the accounts payable account decreases by $10,000.

5.

Consider the following balance sheet: Cash $ 70,000Accounts payable $ 30,000 Accounts receivable 30,000Long-term debt 20,000 Inventories 50,000Common stock 200,000 Net fixed assets 350,000Retained earnings 250,000 Total assets $500,000Total claims $500,000 Assume that the business uses $30,000 of its cash to pay salaries. Which of the below statements reflects the resulting balance sheet change?

The cash account decreases by $30,000 and the long-term debt account is reduced by $30,000.

There is a change to the right-hand side only.

The cash account decreases by $30,000 and the retained earnings account is reduced by $30,000.

The company does not have the ability to pay $30,000 in salaries.

There is a change to the left-hand side only.