Question

Question 1 (1 point) Saved The following are all estimates that companies are permitted to use when calculating depreciation expense, EXCEPT: Useful Life of the Asset Historical Cost to Acquire Asset Residual (a.k.a. Salvage) Value of the Asset # of total units that the equipment is expected to produce over it's lifetime Question 2 (1 point) Saved Inventory is excluded from current assets in the quick ratio because inventory is not as easily converted into cash. True False

Answer 1

Question 1.

Solution: option 4.is the correct choice. Since, For accounting simplification purpose company generally uses SLM method for computing depreciation expense which doesn't require total number of units expected to be produced over the life time of the asset. Rest three estimates are used for depreciation expense.

Question:2.

Solution: True. The given statement is true because quick ratio shows short term liquidity and under such very short term, it is quite difficult to sell of inventory and convert it into cash.

Question: 3

Solution: option 2. is the correct choice.

All contingent liabilities, for accounting purposes, are shown under the notes to the balance sheet as footer. (For remainder purpose and in case they occur, necessary steps can be taken)

Question:4

Solution: option 4. Is the correct choice.

Since, Accounts Payable are current liability not contingent liability.

Question.10

Solution: False. Because depreciation expense keeps changing method to method. Each method has a different amount of depreciation.