Colleen Operates a Business as a Sole Proprietorship

question 121

Multiple Choice

Colleen operates a business as a sole proprietorship. She purchased a computer for $10,000 last year. The computer is five-year recovery property for MACRS purposes and is depreciated under the regular MACRS rules. This year, Colleen incorporates the business and transfers the computer to the new corporation on July 20. The depreciation on the computer for this year allocable to the sole proprietorship is

• A)$1,868.
• B)$1,600.
• C)$1,333.
• D)$500.

Understanding the importance of reliability in screening instruments and its limitations.

Understand and describe the different categories of investments (trading, available-for-sale, held-to-maturity) and their respective accounting treatments.

Explain the concept of fair value as it relates to the reporting of securities and how it affects the balance sheet and income statement.

Recognize the importance and method of initial investment recording at cost.

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Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors, using fewer resources.

Opportunity Cost

A different way to describe it would be the cost of missing out on the benefits of the second-best option when a choice is made.