11. If an asset produces more revenue in its early years, the depreciation method best suited for this asset is the

A. straight-line method.

B. expense method.

C. units-of-production method.

D. double-declining balance method.

12. Under the allowance method, recording the receipt of cash after an account has been written off first requires that you

A. audit the customer's account.

B. reinstate the customer's account.

C. debit Allowance for Doubtful Accounts.

D. debit Bad Debt Expense.

13. The Premium on Bonds Payable account is added to the Bonds Payable account, so it's called a/ an _______ account.

A. premium

B. adjunct

C. contra

D. aspect

14. Capital leases are most similar to

A. accounts payable.

B. regular notes payable.

C. mortgage notes.

D. unearned revenue.

15. Import Auto reported interest expense of $5,200, income tax expense of $23,000, and net income of $78,000. What is Import Auto's interest coverage ratio (rounded to two decimals)?

A. 0.50

B. 0.05

C. 20.42

D. 19.42

16. Skymaster, Inc. has cash of $33,000, net accounts receivable of $41,000, short-term investments of $15,000, and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. What is the current ratio for Skymaster, Inc.?

A. 3.80

B. 2.47

C. 1.48

D. 1.43

17. Which of the following is considered an estimated liability?

A. Warranties payable

B. Sales tax payable

C. Notes payable

D. Pending litigation

18. A new vehicle was purchased on January 1 for $38,000. It has a salvage value of $7,000 and a useful life of 5 years. Using the straight-line method, how much will the depreciation expense for the vehicle be for the first year (to the nearest dollar)?

A. $6,200

B. $633

C. $7,600

D. $517

19. Interest rates are almost always stated for a period of

A. one year.

B. one quarter.

C. six months.

D. one-tenth of the note term.

20. A three-month note dated June 12 will mature on

A. September 1.

B. June 12.

C. September 12.

D. September 30.