Multiple Choice

7) Beginning inventory + Net purchases = A) Cost of goods sold. B) Cost of goods available for sale. C) Gross profit. D) Ending inventory. 8) Cost of Goods Sold is often one of the largest: A) expenses on the Income Statement. B) long-term assets on the Balance Sheet C) current assets on the Balance Sheet. D) part of general selling expenses. 9) For accounting information to be useful it must be all of the following EXCEPT: A) reliable. C) relevant B) understandable. D) economical 10) What agency writes U.S. GAAP? A) IRS C) FASB. B) SEC. D) IASB. 11) What procedure is used to ensure financial reports abide to GAAP principles? A) an examination. C) a review. B) an audit. D) a confirmation. 12) Which of the following would NOT be considered part of the cost of a new long-term asset? A) Repairs and maintenance after start-up B) Packaging for delivery C) Repairs and maintenance after the asset is in operation D) Transportation and insurance costs to get the asset to the purchaser 13) What is the best method for depreciating items a vehicle? A) straight-line method. B) single-declining balance method. C) units-of-production method. D) double-declining method