orted in what order? a· liquidity b profitability c. tangibility d. ownership 6.

Question

orted in what order? a· liquidity b profitability c. tangibility d. ownership 6. If Mary wanted to save a set amount at the end of each month in order to buy a new pick-up truck when the new models are next availabie, which time value concept would be used to determine the monthly payment? a. Present value of one lump sum b. Future value of annuity due c. Present value of an annuity ordinary annuity. d. Future vailue of an erdinary annuity 7. What is the normal joumal entry when making a provision for bad debts expense under the ellowance method? a. Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b. Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c Debit Bsd Debt Expense, credit Allowance for Doubtul Accounts. d. Debit Accounts Receivable, credit Allowance for Doubtful Accounts 8. Which of the following are decreasing-charge, also called accelerated depreciation methods? a. Straight line and declining balance b. The sum-of-the -years digits and declining balance c. Units of output and straight line d. Declining balance and units of output 9. If an asset is impaired, the impairment tast reveals that the asset's a, future cash flows are greater than book value b. cost is less than fair value c. useful life is less than estimated d. book value is greater than future cash flows 10. Which of the following are characteristics of intangible assets? a. Lack physical existence. b. They are not financial instruments c They amortize d. All are

Explanation / Answer

5. (a) Liquidity

6. (d) Future value of an ordinary annuity

7. (c) Debit bad debt expense, credit allowance for doubtful debts

this is the journal entry we pass at the time of recognition of bad debts.

8. (b) The sum of the years digit and decling balance

9. Impairment loss = Carrying Amt. - Receoverable Amt.

measn (d) Book value is greater than future cash flows

10. intangible assets charterstics are as follows -

(a) lack physical existence

(b) they are not financial instrument

(c) They amortize

so correct option is (d) All are.

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