A Company That Utilizes the MACRS System of Depreciation

question 101

Multiple Choice

A company that utilizes the MACRS system of depreciation:

• A)will have equal depreciation costs each year of an asset's life.
• B)will have a greater tax shield in year two of a project than it would have if the firm had opted for straight-line depreciation, given the same depreciation life.
• C)can depreciate the cost of land, if it so desires.
• D)will expense less than the entire cost of an asset.
• E)cannot expense any of the cost of a new asset during the first year of the asset's life.

Understand the options available when creating a report with the Report Wizard.

Identify the formatting enhancements themes apply to reports.

Know how to configure font settings for tables in Table Datasheet view.

Comprehend the effects of changing font color for primary key fields in tables.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends, but rather kept by the company for reinvestment in its operations or to pay debt.

Closing Process

The accounting procedures used to close out business accounts at the end of an accounting period.

Income Summary Account

A temporary ledger account used during the closing process that accumulates revenues and expenses before transferring the net amount to the capital or retained earnings account.

Net Income

The sum of money a company retains as profit after all financial obligations and taxes are deducted from its total income.