1. Return on assets equals:
   1. Profit margin Inventory turnover. B) Gross profit ratio Asset turnover.

C) Gross profit ratio Inventory turnover. D) Profit margin Asset turnover.

2. On December 1, 2018, ABC signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2019. ABC records the appropriate adjusting entry for the note on December 31, 2018. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2019?

A) $301,250. B) $300,000. C) $307,500. D) $306,250.

3. Research and development costs should be capitalized when the:
   1. Future benefit is probable and the amount cannot be reasonably estimated.
   2. Future benefit is reasonably possible and the amount can be reasonably estimated.
   3. Future benefit is probable and the amount can be reasonably estimated.
   4. None of these.

4. ABC purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the second year of use for $5,000 cash. ABC should record:
   1. neither a gain nor a loss - the gain that occurred in this case would not be recognized.
   2. a gain of $1,000.
   3. a loss of $1,000.
   4. neither a gain nor a loss - the computer was sold at its book value.

5. In Cash Flow reporting Accounts Receivable is measured at
   1. Benefit Value B) $0

C) It depends on the measuring system D) Sacrifice Value