What accounting concept justifies the use of accruals and deferrals?
a. Going-concern assumption
b. Corporate form of organization
c. Consistency characteristic
d. Arm's-length transactions
A
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Martin purchased an annuity contract at the beginning of 2002 for $84,000. The contract specifies that he will receive $2,000 per month for life. Martin receives his first payments on July 1, 2014, when he was 67 years old. Martin dies on August 15, 2019 (the August payment was received prior to his death). What amount, if any, should be deducted on Martin's 2019 tax return as a result of failing to receive his expected return on the annuity contract?
A. $54,400 can be claimed as a deduction on his final return. B. $59,200 can be claimed as a deduction on his final return. C. $1,600 can be claimed as a deduction on his final return. D. No deduction is reported because a decedent is not required to file a final return.
Which of the following is not true regarding payroll cards?
A) The employer can require employees to accept their wages on these cards. B) Employers use payroll cards because they are cheaper than issuing payroll checks. C) Fees are frequently associated with the cards. D) The cards are convenient for employees who lack bank accounts.
Explain the difference between temporary and permanent accounts.
What will be an ideal response?
Porter Co. is analyzing two potential investments. Project XProject YCost of machine$68,000 $60,000 Net cash flow: Year 1 24,000 4,000 Year 2 24,000 26,000 Year 3 24,000 26,000 Year 4 0 20,000 If the company is using the payback period method and it requires a payback of three years or less, which project(s) should be selected?
A. Project Y. B. Project Y because it has a lower initial investment. C. Both X and Y are acceptable projects. D. Neither X nor Y is an acceptable project. E. Project X.