Question

Which of the following statements about the Accumulated depreciation account is (are) correct? (Check all that apply.) 

• Accumulated depreciation is an expense account. 

• The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account. 

• Accumulated depreciation is a contra account. 

• Accumulated depreciation is added to its plant asset on the income statement. 

• Accumulated depreciation is subtracted from its plant asset on the balance sheet. 

• Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase.

Explain what unearned revenues are by selecting the statements below which are correct. (Check all that apply.) 

• They are a liability. 

• They are reported on a balance sheet. 

• They refer to earnings which have been earned, but not yet billed. 

• They are also called accounts receivable. 

• They are also called deferred revenues. 

• They refer to cash received in advance of performing a service or product.

Answer 1

1

The following statements about the accumulated depreciation account are correct:

The Accumulated depreciation account allows the original cost of the asset to remain in the plant asset account.

Accumulated depreciation is a contra account

Accumulated depreciation is subtracted from its plant assets on the balance sheet

Accumulated depreciation accumulates the total depreciation taken on an asset since its purchase.

2

Unearned revenues are:

They are a liability.

They are reported on a balance sheet

They are also called deferred revenues.

They refer to cash received in advance of performing a service or product.