True or False(T/F)

1. For tax purposes, both gains and losses are recognized on exchanges of similar assets.
2. The Modified Accelerated Cost Recovery System method of depreciation subtracts salvage value before calculating the annual depreciation expense.
3. Furniture and equipment are examples of tangible assets. TRUE
4. If there is an improvement to a building that extends the life of the building, the total cost incurred should be debited to the long-term asset.
5. The write-off of the cost of a wasting asset is called amortization. FALSE
6. Transactions involving the purchase of long-term assets are entered by crediting the proper asset account and debiting the cash account or proper liability account.
7. The depreciation method using a fixed rate applied to the book value of the asset each year, resulting in successively smaller depreciation charges as the undepreciated cost diminishes year by year, is called the declining balance method.
8. In accounting for exchanges of similar assets considered to have "commercial substance," financial accounting recognizes all gains and losses.