1.Firm ABC had the following gift card transactions in July 2021:

• July 1: A gift card valued at $1,000 that was sold in July 2020 expired
• July 15: Sold gift card valued at $2,000
• July 30: Customer used gift card to purchase $1,600 worth of merchandise

2.On which of the following date(s) would Firm ABC recognize gift card revenue?

	a.	July 15 and July 30
	b.	July 1
	c.	July 1 and July 30
	d.	July 15

3.Please complete the following equation: Assets - Liabilities = ?

	a.	Stockholders' Equity (or Shareholders' Equity)
	b.	Market Value
	c.	Net Income
	d.	Net Liabilities

4.Which of the following would NOT be classified as a current liability?

	a.	Current maturities of long-term obligations that will be refinanced.
	b.	Deposits that are refundable.
	c.	Debt that is callable by the lender in the coming year.
	d.	Accounts payable.

5.Firm C has a December 31 year-end and uses the straight-line depreciation method for long-lived assets. On January 1, 2021, Firm C purchases the following asset:

Asset	Cost	Residual Value	Useful Life (years)
Building	$ 580,000	$ 30,000	10

a.Prepare the journal entry to record 2021 depreciation expense for the building.

b.Assume the building is sold on June 30, 2023 for $500,000. Prepare the journal entry to update depreciation on the building to the date of sale.

c.Assume the building is sold on June 30, 2023 for $500,000. Prepare the journal entry to record the sale of the building.

6.On January 1, 2021, Firm ABC began constructing a new warehouse. The warehouse was finished and ready for use on December 31, 2021. Expenditures on the project were as follows:

Date of Expenditure	Expenditure Amount
January 1, 2021	$ 205,000
October 1, 2021	$ 306,000

76ers.To finance the project, Firm ABC took out a $350,000 construction loan with a stated interest rate of 7%. The construction loan was outstanding throughout the construction period. In addition, Firm ABC had $50,000 in bonds payable with a stated interest rate of 4% outstanding during 2021.

The amount of interest capitalized for 2021 was:

	a.	$19,705
	b.	$20,650
	c.	$24,500
	d.	$22,855

8.Firm ABC provides its ten employees two weeks of paid vacation each year. During 2020, Firm ABC's employees earned $1,200 per week. By the end of 2020, there are ten weeks of earned vacation that have not been taken. On December 31, 2020, Firm ABC makes an adjusting journal entry to establish a liability for vacation earned but not taken.

This adjusting entry would include which of the following:

	a.	Debit to Liability - Compensated Future Absences in the amount of $9,600
	b.	Credit to Liability - Compensated Future Absences in the amount of $9,600
	c.	Credit to Liability - Compensated Future Absences in the amount of $12,000
	d.	Debit to Liability - Compensated Future Absences in the amount of $12,000

9.Firm ABC exchanged 2,000 shares of its common stock for equipment. There is no readily available estimate of the stock's fair value. The fair value of the equipment is $80,000.

The journal entry to record this transaction includes:

	a.	Credit to Stock Revenue in the amount of $80,000
	b.	Credit to Equipment in the amount of $80,000
	c.	Debit to Equipment in the amount of $80,000
	d.	Debit to Common Stock in the amount of $80,000

10.When an impairment loss is recorded, which of the following is true:

	a.	The balance sheet shows reduced net assets.
	b.	The income statement shows reduced net income.
	c.	All of the statements are true.
	d.	The statement of cash flows is not impacted.

11.An activity-based depletion method is most often used to allocate the cost of a natural resource because:

	a.	This is the simplest method and natural resource activity is hard to estimate.
	b.	This method results in the highest amount of depletion in the earlier years of useful life.
	c.	The usefulness of natural resources is directly related to the amount of the resources extracted.
	d.	This method results in greater net income in the later years of useful life.