Question

1)

What important topics are discussed in the Management Discussion and Analysis section of the financial statements?

Business risk factors associated with the company.

Management provides insight into key decisions implemented during that time period and future developments.

Management utilizes this area as a forum to discuss strategic motives.

All of these choices are discussed.

2)

After completing the bank reconciliation, which of the following reconciling items would require an adjusting journal entry on the company's books?

deposits in transit

service charges

outstanding checks

cash on hand

3)

Deposits made directly by the bank would be

added to the bank statement balance.

added to the company's records.

deducted from the bank statement balance.

deducted from the company's records.

4)

Which one of the following statements is not true?

Straight-line depreciation may be used instead of MACRS for income tax reporting.

Salvage value is not considered when the MACRS system is in use.

Economic lives may be different from MACRS lives.

If MACRS is used for tax purposes, it must be used for book purposes.

Answer 1

ans 1
Option b Management provides insight into key decisions implemented during that time period and future developments.
ans 2 Option B Service charge
As service charge already has decraesed the balance of bank
as it is directly debited in bank but not shown in cash books
hence an adjusting entry needs to be passed to dinclude it
in cash book. Bank chargeds dr Cash cr
ans 3 Option b Added to the company records
As direct deposits increase the balance hence it should be
added to company cash book to show the deposits.
Ans 4
Option d If MACRS is used for tax purposes, it must be used for book purposes.
Its not mandatory to use MACRS for book purpose , for books various
methods of depreciation can be used