Question: Depreciation expense is used to:  

a) allocate costs to all departments of the firm. 

b) determine when an asset is fully paid off. 

c) allocate historical cost over the life of an asset. 

d) equate the historical cost and market values of an asset.

Question: Increases to Retained earnings result from: 

a) the sale of additional shares of stock to investors. 

b) income not paid to shareholders. 

c) an excess of assets over liabilities. 

d) market values that exceed book values