Multiple Choice Answers

Goodwill is __________.

a. Amortized similar to other intangibles
b. Only written down if an impairment in value occurs
c. Charged to expense immediately
d. Amortized over 40 years or its economic life whichever is shorter

The ability of a business to pay its debts as they come due is referred to as the factor of:

a. leverage
b. profitability
c. wealth
d. solvency
A machine with a useful life of 10 years and a residual value of $2,000 was purchased for $18,000. What is depreciation expense for the second year under the declining balance method?

a. $1,620
b. $2,880
c. $2,560
d. $2,960

A corporation purchased 1,000 shares of its $10 par common stock at $20 and subsequently sold 500 of the shares at $30. What is the amount of revenue realized from the sale?

a. $0
b. $2,500
c. $5,000
d. $15,000

Corporate annual reports typically do not contain which of the following?

a. financial highlights
b. SEC statement expressing an opinion
c. management report
d. historical summary