I need help to determine which ones are true and which are false? please help!!!?
Question by Help me!: I need help to determine which ones are true and which are false? please help!!!?
3. When cities give land or buildings to a company to locate in the community, no entry is made since there is no cost to the company.
4. Once the useful life of a depreciable asset has been estimated and the amount to be depreciated each year has been determined, the amounts can not be changed.
5. The amount of the depreciation expense for the second full year of use of a fixed asset costing $ 100,000, with an estimated residual value of $ 5,000 and a useful life of 4 years, is $ 25,000 by the declining-balance method at twice the straight-line rate.
6. If a fixed asset with a book value of $ 10,000 is traded for a similar fixed asset, and a trade-in allowance of $ 15,000 is granted by the seller, the buyer would report a gain on disposal of fixed assets of $ 5,000.
7. When a company establishes an outstanding reputation and has a competitive advantage because of it, the company should record goodwill on its financial statements.
8. The proceeds from discounting a $ 20,000, 60-day, note payable at 6% is $ 20,200.
ANS: F DIF: Moderate OBJ: 10-01
9. Interest expense is reported in the operating expense section of the income statement.
10. Most employers are required to withhold federal unemployment taxes from employee earnings.
11. In order to be a recorded contingent liability, the liability must be possible and easily estimated.
12. The corporation was defined as a separate legal entity by Chief Justice Marshall during the twentieth century.
13. Double taxation is a disadvantage of a corporation because the same party has to pay taxes twice on the income.
14. The two main sources of stockholders’ equity are investments contributed by stockholders and net income retained in the business.
15. When no-par common stock with a stated value is issued for cash, the common stock account is credited for an amount equal to the cash proceeds.
Best answer:
Know better? Leave your own answer in the comments!
