The accounting equation can be expressed as (Points : 1) Owner’s Equity = Assets + Liabilities. Assets = Liabilities + Owner’s Equity Assets = Liabilities - Owner’s Equity. Liabilities = Assets + Owner’s Equity. 2. Liabilities are defined as (Points : 1) Owners’ claims on assets. Outsiders’ claims on assets. Increases in cash. Future economic benefits. 3. Assets are reported on the (Points : 1) Consolidated Income Sheet. Statement of Cash Flows and Other Economic Benefits. Balance Sheet. Income Statement of Continuing Operations. 4. When determining whether to record an asset as a fixed asset, what two criteria must be met? (Points : 1) Must be an investment and must be long-lived. Must be long-lived and must use the asset in a productive manner. Must be long-lived and must be a tangible asset. Must be a tangible asset and must be an investment. 5. Depreciation is (Points : 1) The loss in market value of an asset. The allocation of a long-term asset’s cost to an expense account over the asset’s life. An increase in an asset’s value over time. Writing the asset up or down to market value. 6. Current liabilities are liabilities that (Points : 1) Must be paid in the current operating cycle. Must be paid from revenues. Must be of a definite amount. Are due when the company can pay. 7. Net accounts receivable are (Points : 1) Accounts receivable plus the allowance for doubtful accounts. Accounts receivable less the allowance for doubtful accounts. Accounts receivable less bad debt expense. Sales collections for the period.
8. When a bond sells at a discount, the stated rate of interest is (Points : 1) Equal to the market rate of interest. Unimportant to the purchaser. Less than the market rate of interest. Determined by the government. 9.
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