Ms. Kumar Review for April 19th Test

The Income Summary account is one of the accounts used to adjust the Merchandise Inventory account at the end of the fiscal period.

• True

• False

The tax rate associated with an income tax bracket is called the effective tax rate.

• True

• False

Depreciation expense is recorded on all plant assets.

• True

• False

All accounts are listed on the unadjusted trial balance regardless of whether there is a balance or not.

• True

• False

The book value of a plant asset is its original cost minus accumulated depreciation.

• True

• False

Functional depreciation should be considered in estimating the useful life of computer equipment.

• True

• False

The annual straight-line depreciation of equipment costing $7,000.00 with a salvage value of $1,000.00 and a useful life of 5 years would be $1,400.00.

• True

• False

The Internal Revenue Service sets the amounts and rates of the tax brackets used to calculate federal income tax expense.

• True

• False

A business can use any 12-month period for reporting its financial performance.

• True

• False

The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called accumulated depreciation.

• True

• False