Answer these:

According to the matching principle, future removal and site restoration costs, especially for a natural resource, must be

Question 1 options:

a)	expensed as incurred.
b)	estimated in advance and allocated over the useful life of the natural resource.
c)	estimated in advance and expensed completely in the year of acquisition of the related natural resource.
d)	expensed in the final year of operations.

Question 2 (1 point)

A company purchased factory equipment for $100,000. It is estimated that the equipment will have a $10,000 residual value at the end of its estimated 5-year useful life. If the company uses the double declining-balance method of amortization, the amount of annual amortization recorded for the second year after purchase would be

Question 2 options:

a)	$40,000.
b)	$24,000.
c)	$36,000.
d)	$21,600.

Question 3 (1 point)

If a capital asset is retired before it is fully amortized, and the residual value received is less than the asset's book value,

Question 3 options:

a)	a gain on disposal occurs.
b)	a loss on disposal occurs.
c)	there is no gain or loss on disposal.
d)	additional amortization expense must be recorded.

Question 4 (1 point)

When using the Balance Sheet method, a percentage of the outstanding accounts receivable is calculated as the estimate of uncollectible bad debts. That calculated amount is:

Question 4 options:

	Added to the Allowance for Doubtful Accounts
	Subtracted from the Allowance for Doubtful Accounts
	The new balance of Allowance for Doubtful Accounts
	Expensed completely.

Question 5 (1 point)

Your business receives full payment of $500 for an account receivable that was previously written off is collected. Before the entry to record the payment is recorded, the following entry must be made

Question 5 options:

	Debit Accounts Receivable, Credit Allowance for Doubtful Accounts
	Debit Allowance for Doubtful Accounts, Credit Accounts Receivable
	Debit Bad Debts Expense, Credit Allowance for Doubtful Accounts
	Debit Bad Debts Expense, Credit Accounts Receivable

Question 6 (1 point)

Management should select the amortization method that

Question 6 options:

	is easiest to apply.
	best measures the capital asset's market value over its useful life.
	best measures the capital asset's contribution to revenue over its useful life.
	has been used most often in the past by the company.

Question 7 (1 point)

A change in the estimated useful life of equipment requires

Question 7 options:

	retroactive change in the amount of periodic amortization recognized in previous years.
	that no change be made in the periodic amortization so that amortization amounts are comparable over the life of the asset.
	that the amount of periodic amortization be changed in the current year and in future years.
	that income for the current year be increased.

Question 8 (1 point)

The interest on a note receivable is recognized at:

Question 8 options:

a)	The maturity of the note
b)	When the note is paid
c)	When the note is issued
d)	Interest is never recognized

Question 9 (1 point)

The balance in the Accumulated Amortization account represents the

Question 9 options:

a)	cash fund to be used to replace capital assets.
b)	amount to be deducted from the cost of the capital asset to arrive at its fair market value.
c)	amount charged to expense in the current period.
d)	amount charged to expense since the acquisition of the capital asset.

Question 10 (1 point)

Which of the following is an intangible asset that results from the purchase of a business for more than its net asset value?

Question 10 options:

	Goodwill
	Patent
	Trademark
	Trade name

Question 11 (1 point)

The Income Statement Method of estimating bad debts:

Question 11 options:

a)	applies a percentage to the accounts receivable
b)	applies a percentage to the net credit sales
c)	writes off bad debts as they're incurred only
d)	can be used in a company with a cash only policy

Question 12 (1 point)

A promissory note is issued when:

Question 12 options:

a)	One business loans another business money
b)	When an extraordinary credit term is granted
c)	An agreement is made between companies for outstanding accounts receivable that will now earn interest.
d)	All of the above