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Validity of Depreciation Situations

The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset. True or False

The safeguarding of assets is an objective of a company's system of internal control. True or False

Accounts receivable are one of a company's least liquid assets. True or False

The direct write-off method of accounting for uncollectible accounts is preferred by GAAP. True or False

Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer. True or False

The contractual interest rate is always less than the market rate of interest on the dates that bonds are issued. True or False

Corporations often issue bonds rather than secure bank financing because many banks are unwilling to lend large amounts of capital to any one firm. True or False

As soon as a corporation is authorized to sell stock, an accounting journal entry should be made recording the total value of the shares authorized. True or False

Current liabilities are included when determining working capital. True or False

Solution Preview

1. True
Book Value = Cost - Accumulated Depreciation

2. True
Safeguarding assets is an internal control objective

3. False
Inventory of ...

Solution Summary

The solution explains some true / false questions relating to financial accounting