Question

2. Companies whose financial statements are to be audited or reviewed by a CPA... a. can always use tax depreciation rules for their financial statements. b. can never use tax depreciation methods for their financial statements. c. can use tax depreciation for their financial statements if the difference between the amounts computed under GAAP and rules is not material. d. can sometimes use UOP depreciation for their tax return. 3. If a calendar-year company purchases over $2,500,000 of equipment during 2018, not including buildings, the maximum Section 179 deduction of $1,000,000 is... a. reduced by the amount found in the appropriate IRS table. b. reduced dollar for dollar by the amount of equipment purchased above $2,500,000. c. eliminated. d. still permitted, but no depreciation can be taken for the year. 4. To calculate depreciation using GAAP rules, you must determine an asset's... a. acquisition cost, estimated life, residual value and the depreciation method to be used. b. cost basis and recovery period. C. cost basis, depreciable basis and recovery period. d. cost basis, depreciable basis, recovery period and the depreciation method to be used. 5. An asset's original cost includes ... a. the invoice price, but not the sales tax or transportation or installation costs. b. the invoice price and sales tax, but not the transportation or installation costs. c. the invoice price, sales tax and transportation costs, but not the installation costs. d. the invoice price, sales tax and transportation and installation costs.

Answer 1

question 2

option b - can never use tax depreciation methods for their financial statements

question 3

option b - reducded dollar for dollar by the amount of equipment purchased

question 4

option a - aquisitin cost, estimated life, residual value and depreciation method to be used.

question 5

option d - the invoice price, sales tax and transportation and installation costs