Q1. When recording depreciation, total assets decrease and total liabilities increase.

A. True B. False

Q2. Liabilities are presented in the financial statements at future value.

A. True B. False

Q3. Quartz Corporation issued $300,000 in bonds that mature in five years. The bonds have a stated interest rate of 8 percent and pay interest on December 31 each year. When the bonds were sold, the market rate of interest was 9 percent. The bonds were issued at par.

A. True B. False

Q4. All of the following are intangible assets except

A. Note Receivable B. Patent C. Goodwill D. Trademark.

Q5. Which of the following rules about contingent liabilities is NOT true?

A. A contingent liability that can be estimated and is probable should be recorded.

B. A contingent liability that cannot be estimated and is probable should be recorded.

C. A contingent liability that can be estimated and is only reasonably possible should

be disclosed but not recorded.

D. All of the above.