dmark Restaurants reported net income in 2008 of 45.9 ation expense of ent of $162.9 million. Which of the following disclosures $48. 8 million. They also report additions to property and would appear 08 statement of cash flows? a. Depreciation of $48.8 million would be deducted from net income under operating activities and the additions $162.9 million would be added under investing activities. b. Depreciation of $48.8 million would be added to net income under operat ing activities and the additions $162.9 million would be added under investing activities c. De operating activities and the additions $162.9 million would be deducted preciation of $48.8 million would be added to net income under under investing activities. d. Depreciation of $48.8 million would be deducted from net income under operating activities an under investing activities. d the additions $162.9 million would be deducted How is the matching principle related to the recording of depreciation on angible long-lived, productive assets? a. The matching principle requires a company to use the same depreciation. b. Once a particular depreciation method is adopted for a particular asset, the owner must continue to use the same method. c. The accountant who calculates the depreciation may assume that the company will continue in business as long as the estimated useful life or the asset d. A portion of the cost of the asset should be allocated as an expense to the periods in which the asset helps the business to generate revenue. Which of the following statements is true? a. Liabilities are initially recorded at the amount of their principle plus interest. b. Liabilities can decrease the return on stockholders' equity if the interest rate paid is less than the return on assets c. Capital structure is the relative proportion of debt and equity financing d. Liabilities are current if due within 60 days 9. Which of the following is false? a. Current liabilities are those that will be satisfied within one year or the operating cycle, whichever is longer b. Liquidity is the ability of the company to meet its total obligations. c. Current liabilities impact a company's 1iquidity Working capital is equal to current assets minus current 1iabilities. 10. On September 1, 2009, Donna Equipment signed a one-year, 8? interest-bearing payable for $50,000. Assuming that Donna Equipment maintains its books on a ote calendar year basis, the 2010 income statement for this note (rounded to the nearest dollar) anount of interest expense that should be reported in the would be a. $2,667. b. $4,000 c. $1,333 d. $3,000