25. In accounting for bad debts:

a. The allowance method matches losses with related sales better than the direct write-off method.

b. The direct write-off method involves estimating credit losses.

c. The direct write-off method consistently understates assets on the balance sheet.

d. Both (b) and (c)

26. If a company fails to make an adjusting entry to estimate doubtful accounts, then this error:

a. Understates owners equity

b. Understates assets

c. Overstates net income

d. Overstates expenses

27. A note for $24,000 is dated May 3, 2019 and it matures on August 1, 2019. The note is a:

a. 3-month note

b. 90-day note

c. 91-day note

d. Both A and B

28. If Bruce Company fails to make an adjusting entry to accrue interest on a note receivable, then this error:

a. Overstates expenses

b. Understates income

c Understates assets and owners equity

d. b and c

29. The purpose of depreciation accounting is to:

a. Reflect changes in the current value of a plant asset over its useful life

b. Accumulate funds to replace a plant asset at the end of its useful life

c. Allocate a plant assets cost, less its salvage value, to expense over the assets useful life

d. Have a plant assets book value equal its initial cost by the end of its useful life

30. Which of the following plant assets is not depreciated?

a .Furniture and equipment

b. Land improvements

c. Delivery truck

d. All of these are depreciated