mated to be uncollectible. If ti ment to record bad debts for the 34. An aging of a company's accounts receivable indicates that $9,000 are es Allowance for Doubtful Accounts has a $1,100 credit balance, the adjust period will requirea A) credit to Allowance for Doubtful Accounts for $9,000 B) debit to Allowance for Doubtful Accounts for $7,900 C) debit to Bad Debts Expense for $7,900. D) debit to Bad Debts Expense for $9,000 35. Under a perpetual in ventory system, the cost of goods sold is determined each time a sale occurs. A) True B) False 36. Sales minus operating expenses equals gross profit. A) True B) False 37. Once an asset is fully depreciated, no additional depreciation can be taken even though the asset is still being used by the business. A) True B) False 38. Cost allocation of an intangible asset is referred to as A) amortization. B) accretion C) depletion D) capitalization. 39. A company that receives an interest bearing note receivable will A) debit Notes Receivable for the maturity value of the note. B) credit Notes Receivable for the maturity value of the note. C) credit Notes Receivable for the face value of the note. D) debit Notes Receivable for the face value of the note. 40. The face value of a note refers to the amount A) that is identified on the formal instrument of credit B) that can be received if sold to a factor C) remaining after a service charge has been deducted D) borrowed plus interest received at maturity from the maker. 41. In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense? A) Income tax expense for the period will be the same under all assumptions. B) Average Cost C) FIFO D) LIFO 42. If employees are bonded A) it is impossible for them to steal from B) it means that they are not allowed to handle cash. C) they have worked for the company for at least 10 years. D) they have been insured against misappropriation of assets. the company Page 6 F21BF17