Reference no: EM132944205

Problem 1: Which of the following is a false statement about depreciation?

Option 1: It has no impact on cash

Option 1: It represents the physical deterioration of an asset

Option 1: It exists because of the matching principle

Option 1: Accelerated methods of calculating depreciation are acceptable under GAAP

Problem 2: Allowance for Uncollectible Accounts is

Option 1: An Asset

Option 2: A Liabilitity

Option 3: An Expense

Option 4: A Contra-Asset

Problem 3: After preparing a bank reconciliation, journal entries are necessary to record

Option A: Bank service charges

Option B: Deposits in transit

Option C: Outstanding checks

Option D: Both B and C are correct

Option E: A, B, and C are correct

Problem 4: Which of the following costs are NOT typically capitalized when acquiring a new piece of equipment?

Option 1: Calibration costs

Option 2: Interest on the loan necessary to acquire the equipment

Option 3: Freight charges to bring the equipment to its intended location

Option 4: Installation costs

Problem 5: Closing entries

Option 1: Zero out balance sheet accounts

Option 2: Record year-end entries not recorded in the normal course of business

Option 3: Zero out income statement accounts

Option 4: Are optional, depending on the type of entity involved