5. Long-term debt (bonds) would likely be used for which of the following?

A. paying insurance premiums

B. paying employee salaries C. purchasing inventory

D. acquiring another company

E. None are correct

8. Warranties are guarantees of products or services for a period of time. Which of the following is true?

A. Warranties must be for a period of not less than 5 years

B. Amounts and timing of warranty obligations are known with certainty.

C. All warranties involve an immediate cash outflow

D. Seller will replace or repair any defective products within specified time period at no charge.

E. All are false

21. The term Salvage Value can be best described as

1. The amount an intangible asset can be purchased
2. Expected market value of a fully depreciated asset
3. Future expected cost to replace a depreciable asset
4. Cost of a depreciable asset minus accumulated depreciation
5. None are correct

22. In a period of declining prices, which inventory cost flow method will produce the lowest amount of gross margin? A. FIFO. B. Weighted average. C. LIFO. D. Specific identification E. None of the above

23. Which of the following is not an accurate description of the Allowance for Uncollectible Accounts?

A. an estimate of the amount of accounts receivable that will not be collected B. an income statement account C. a contra account D. a balance sheet account E. None of the above

24. When prices are rising, which method of inventory would likely be used for an antiques store?

A. Weighted average B. FIFO C. LIFO

D. Specific identification E. NIFO