Question

TRUE OR FALSE - ACCOUNTING

1. The book value of a fixed asset reported on the balance sheet represents its market value.
2. Straight line depreciation is computed by dividing the depreciable cost by the estimated useful life.
3. When the company uses a perpetual inventory system it always knows how much inventory it has available to sell.
4. The matching principle requires expenses be recorded in the same period that the related revenue is recorded.

Answer 1

1. False - book value = cost less accumulated depreciation
2. True
3. True
4. True