1. Depreciation is the process of:

a. valuing an asset at its fair value.

b. increasing the value of an asset over the periods in which it is used.

c. allocating the cost of an asset to the periods in which it is used.

d. writing down an asset to its real value each accounting period.

1. The primary source used in the preparation of the financial statements is the:

a. trial balance.

b. post-closing trial balance.

c. general trial balance.

d. adjusted trial balance.

1. On June 15, Oakley Inc. sells inventory on account to Sunglass Hut (SH) for $1,000, terms 2/10, n/30. On June 20, SH returns to Oakley inventory that SH had purchased for $300. On June 24, SH completely fulfills its obligation to Oakley by making a cash payment. What is the amount of cash paid by SH to Oakley?

A) $680

B) $686

C) $700

D) $1,000