(1)Which of the following changes made by Fox Co. in 2020 would require changing amounts on the 2019 and 2018 columns of Fox's comparative income statement for 2020:

1) Change in inventory method to FIFO from LIFO

2) Change from straight-line to declining balance method

A. Both 1) & 2)

B. 2) only

C. 1) only

D. Neither 1) nor 2)

(2)Which of the following statements, applying US GAAP wherever appropriate, isfalse?

A. Bond interest payable is a current liability whereas bond payable is generally a long-term liability.

B. Interest expense reduces both book and taxable income, whereas dividends declared reduce neither.

C. Fox Co. issues bonds at discount to Owl Co., so Fox is debt financing whereas Owl is equity investing.

D. Bond interest expense is generally based on effective rate whereas cash interest is based on stated rate.