1.Which of the following statements is true of the directwrite-off method?

A.

It provides better matching of revenues with expenses.

B.

GAAP requires public companies to follow the directwrite-off method.

C.

It results in more accurate net income than any other method.

D.

It is only suitable for small companies that have very few uncollectible receivables.

2.Which of the following statements regarding debt securities isincorrect?

A.

When recording the receipt of interest revenue on Trading DebtInvestments, Interest Revenue is credited.

B.

All investments in debt securities are categorized aslong-term assets.

C.

Debt securities includeHeld-to-Maturity DebtInvestments, Trading DebtInvestments, andAvailable-for-Sale Debt Investments.

D.

If aHeld-to-Maturity Debt Investment is purchased at a discount orpremium, thediscount/premium must be amortized when the interest revenue is earned.

3. A contingent liability is a potential, rather than an actual liability, because it depends on a future event. true/false?

4. The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date, and the remaining portion is long term. true/false?

5.

Preferred stockholders________.

A.

receive a dividend preference over common stockholders

B.

are guaranteed that they will not have a loss on their investment

C.

generally have voting rights

D.

have more investment risk compared to common stockholders

6. The key differences between the cash basis and accrual basis of accounting can be explained by understanding the rules of debits and credits. true/false?

7. It is important for a business to identify policies which ensure that all customers are treated similarly and that results can be measured effectively. true/false?

8. A receivable is a liability because it represents a right to receive cash in the future. true/false?

9. The cost principle requires a business to record the assetsacquired, or servicesreceived, at their actual cost. true/false?