A Computer Was Bought for $2 000

question 5

Multiple Choice

A computer was bought for $2 000. After three years of service it can be sold for $500. If straight line depreciation is assumed, what was the computer's book value at the end of year 2?

• A)$2 000
• B)$1 500
• C)$1 000
• D)$500
• E)$0

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Definitions:

Direct Transfer

The movement of assets or funds from one type of account or investment vehicle directly to another without taking possession, often seen in IRA or 401(k) rollovers.

Share Certificates

Physical documents issued by a company that certify the holder is the owner of a specified number of shares in that company.

Sole Proprietorship

A business structure in which a single individual owns the company and is responsible for its debts and liabilities.

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income.