An Accountant Who Forgets About Depreciation Charges for the Year

question 11

Multiple Choice

An accountant who forgets about depreciation charges for the year in drawing up the profit and loss statement and balance sheet will:

• A)overstate the profits for the year.
• B)understate the profits for the year.
• C)overstate the liabilities of the firm.
• D)understate the liabilities of the firm.
• E)understate the net worth of the firm.

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Definitions:

Constant Over Time

Refers to a variable or a condition that does not change as time progresses, remaining stable in both the short term and the long term.

Bureau of Labor Statistics

A U.S. government agency responsible for collecting and analyzing labor economics and statistics.

Current Population Survey

A monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics to gather employment and unemployment data.

Adult Population

The segment of the population that is considered to be of working age and is often analyzed in economic studies for labor force and unemployment statistics.