Deck 7: Long-Term Assets

Question 1

The following financial information is from Cook Company: $$\begin{array} { | l | r | } \hline \text { Accounts Payable } & \$ 55,000 \\\hline \text { Land } & \$ 90,000 \\\hline \text { Inventory } & \$ 10,500 \\\hline \text { Accounts Receivable } & \$ 7,500 \\\hline \text { Equipment } & \$ 8,000 \\\hline \text { Unearned Revenue } & \$ 58,500 \\\hline \text { Short-term Investments } & \$ 20,000 \\\hline \text { Notes Receivable (due in 8 months) } & \$ 45,500 \\\hline \text { Interest Payable } & \$ 2,000 \\\hline \text { Patents } & \$ 75,000 \\\hline\end{array}$$ What is the amount of long-term assets assuming the accounts above reflect normal activity?

A) $342,500.
B) $173,000.
C) $273,500.
D) $98,000.

Answer 1

$173,000.

Question 2

A word, slogan, or symbol that distinctively identifies a company, product, or service is a:

A) Patent.
B) Copyright.
C) Trademark.
D) Franchise.

Answer 2

C

Question 3

Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash. They also incurred a shipping cost of $400 to get the equipment to its factory. The fair value of this equipment is $7,000. For what amount should Bad Brads BBQ record the equipment?

A) $5,000.
B) $5,400.
C) $7,000.
D) $7,400.

Answer 3

B
Explanation: $5,000 + $400 = $5,400.

Question 4

An exclusive 20-year right to manufacture a product or to use a process is a:

A) Patent.
B) Copyright.
C) Trademark.
D) Franchise.

Question 5

The legal life of a patent is:

A) Forty years.
B) Twenty years.
C) Life of the inventor plus fifty years.
D) Indefinite.

Question 6

Morgan Pharmaceutical spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of the year, management feels confident that the new drug will gain FDA approval and lead to higher future sales. What impact will the $50,000 spending have on this year's financial statements?

A) Increase Assets.
B) Decrease Revenues.
C) Increase Expenses.
D) Increase Revenues.

Question 7

Research and development costs should be capitalized when the:

A) Future benefit is probable and the amount can be reasonably estimated.
B) Future benefit is reasonably possible and the amount can be reasonably estimated.
C) Future benefit is probable and the amount cannot be reasonably estimated.
D) None of the above are correct as research and development costs are never capitalized under U.S. accounting rules.

Question 8

Fruitasia purchased land, a building, and equipment for $800,000. The estimated fair values of the land, building, and equipment are $100,000, $700,000, and $200,000, respectively. At what amount would the company record the land?

A) $80,000.
B) $90,000.
C) $100,000.
D) $800,000.

Question 9

The exclusive right to benefit from a creative work, such as a film, is a:

A) Patent.
B) Copyright.
C) Trademark.
D) Franchise.

Question 10

On July 1, 2012, Landon Co. purchased a $500,000 tract of land that is intended to be the site of a new office complex. Landon incurred additional costs and realized salvage proceeds during 2012 as follows: $$\begin{array} { l r } \text { Demolition of existing building on site } & \$ 75,000 \\\text { Legal and other fees to close escrow } & 15,000 \\\text { Proceeds from sale of demolition scrap } & 10,000\end{array}$$ What would be the capitalized cost of the land?

A) $500,000.
B) $575,000.
C) $580,000.
D) $590,000.

Question 11

Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000; sales tax paid $3,000; and installation cost, $2,500. The cost recorded for the equipment was:

A) $60,000.
B) $61,000.
C) $64,000.
D) $66,500.

Question 12

Aspen, Inc. developed a new horse transport device and incurred research and development costs of $250,000. Rather than continue with their own research, Aspen decided to purchase a patent for a similar design from Vail, Inc. for $350,000. What are the total assets and expenses for these developments?

A) Assets $600,000; Expenses $0.
B) Assets $250,000; Expenses $350,000.
C) Assets $350,000; Expenses $250,000.
D) Assets $0; Expenses $600,000.

Question 13

Bio-Lab Pharmaceuticals carried on a project to develop a new drug that dramatically shortened the recovery period for flu infection. The project cost the company $150,000 before Bio-Lab abandoned the project due to the slim possibility to gain FDA approval. Bio-Lab then spent $300,000 on another project developing a kind of shot that achieves the same goal for flu recovery, and the company is confident in gaining FDA approval for the new shot and in making profits out of the shot. What amount would be expensed?

A) $0.
B) $150,000.
C) $300,000.
D) $450,000.

Question 14

Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real Angus on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should Real Angus Steakhouse record the land?

A) $83,500.
B) $84,300.
C) $85,300.
D) $75,000.

Question 15

Bahama Catering purchased a commercial dishwasher by paying cash of $5,000. The dishwasher's fair value on the date of the purchase was $5,600. The company incurred $400 in transportation costs, $300 installation fees, and paid a $200 fine for illegal parking while the dishwasher was being delivered. For what amount will Bahama record the dishwasher?

A) $5,600.
B) $5,700.
C) $5,900.
D) $6,300.

Question 16

Productive assets that are physically used up, or depleted are:

A) Equipment.
B) Land.
C) Land improvements.
D) Natural resources.

Question 17

Research and development costs should be:

A) Expensed in the period incurred.
B) Expensed in the period they are determined to be unsuccessful.
C) Deferred pending determination of success.
D) Expensed if unsuccessful, capitalized if successful.

Question 18

Cowboy Development incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building: Sale price of the land $\quad 400,000$
Sale of salvaged parts already on land $\quad 20,000$
Demolition of the old building $\quad \$ 30,000$
Ground breaking ceremony (food and supplies) $\quad \$ 1,500$
Land preparation and leveling $\quad \$ 7,500$ What amount should be recorded for the purchase of the land?

A) $437,500.
B) $417,500.
C) $439,000.
D) $419,000.

Question 19

Which of the following would be recorded as land improvements?

A) Property taxes.
B) Title insurance.
C) Real estate commissions.
D) Adding a parking lot.

Question 20

Capital Construction purchased a 3-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title insurance was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:

A) $366,400.
B) $366,150.
C) $364,650.
D) $231,150.

Question 21

In accounting, goodwill

A) May be recorded whenever a company achieves a level of net income that exceeds the industry average.
B) Is amortized over its useful life.
C) May be recorded when a company purchases another business.
D) Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify.

Question 22

Which of the following subsequent expenditures would be capitalized?

A) Ordinary repairs and maintenance.
B) Additions.
C) Improvements.
D) Both b and c.

Question 23

The depreciable cost used in calculating depreciation expense is:

A) Its service life.
B) The amount allowable under tax depreciation methods.
C) The difference between its replacement value and cost.
D) The asset's cost minus its estimated residual value.

Question 24

Using the double-declining balance method, depreciation expense for 2012 would be:

A) $24,000.
B) $22,000.
C) $19,000.
D) $20,000.

Question 25

Using the straight-line method, depreciation expense for 2012 would be:

A) $12,000.
B) $11,000.
C) $60,000.
D) None of the other answers are correct.

Question 26

In accounting, goodwill

A) Is never recorded.
B) May be recorded when a company's level of net income exceeds the industry average.
C) Must be expensed in the period when it is acquired.
D) May be recorded when the company purchases another business.

Question 27

The factors used to compute depreciation expense are an asset's:

A) Cost, residual value, and physical life.
B) Cost, residual value, and service life.
C) Fair market value, residual value, and economic life.
D) Cost, replacement value, and service life.

Question 28

The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as:

A) Goodwill.
B) An addition in the Buildings account.
C) An expense in the period incurred.
D) A patent.

Question 29

The replacement of a major component increased the productive capacity of equipment from 10 units per hour to 18 units per hour. The expenditure for the replacement component should be debited to:

A) Repairs Expense.
B) Maintenance Expense.
C) Equipment.
D) Gain from Repairs.

Question 30

Which of the following is considered a "contra" account?

A) Unearned Revenue.
B) Goodwill.
C) Accumulated Depreciation.
D) Costs of Good Sold.

Question 31

Goodwill is:

A) Amortized over the greater of its estimated life or forty years.
B) Only recorded by the seller of a business.
C) The excess of the fair value of a business as a whole over the fair value of all net identifiable assets.
D) Recorded when created internally through advertising expense.

Question 32

Using the double-declining balance method, depreciation expense for 2013 would be:

A) $22,000.
B) $13,200.
C) $14,400.
D) $24,000.

Question 33

Which one of the following regarding the book value of an asset is correct?

A) It is the fair value of the asset if the asset is sold.
B) It reflects the original cost of the asset less accumulated depreciation.
C) It is the original cost of the asset minus the depreciation expense for that asset during the year.
D) It is the original cost at which the asset was purchased.

Question 34

Using the straight-line method, the book value at December 31, 2012 would be:

A) $44,000.
B) $49,000.
C) $55,000.
D) $60,000.

Question 35

Lake Incorporated purchased all of the outstanding stock of Huron Company paying $850,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: $$\begin{array}{l}\text { Current assets (net) }\\\begin{array} { r r } \text { Book Value } & \text { Fair Value } \\\hline \$ 130,000 & \$ 125,000 \\600,000 & 750,000 \\175,000 & 175,000\end{array}\end{array}$$ Lake would record goodwill of:

A) $0.
B) $150,000.
C) $345,000.
D) $850,000.

Question 36

Using the straight-line method, depreciation expense for 2013 and the book value at December 31, 2013 would be:

A) $12,000 and $36,000.
B) $12,000 and $31,000.
C) $11,000 and $33,000.
D) $11,000 and $38,000.

Question 37

Northern purchased the entire business of Southern including all its assets and liabilities for $600,000. Below is information related to the two companies: $\begin{array}{lrr}&\text { Northern }&\text {Southern }\\\text { Fair value of assets } & 1,050,000 & 800,000 \\\text { Fair value of liabilities } & 575,000 & 300,000 \\\text { Reported assets } & 800,000 & 650,000 \\\text { Reported liabilities } & 500,000 & 250,000 \\\text { Net Income for the year } & 60,000 & 50,000\end{array}$ How much goodwill did Northern pay for acquiring Southern?

A) $100,000.
B) $300,000.
C) $200,000.
D) $150,000.

Question 38

Which of the following subsequent expenditures would be capitalized?

A) Ordinary repair.
B) Costs that increase the service life of an asset.
C) Routine maintenance.
D) Both a and c.

Question 39

The balance sheet of Cattleman's Steakhouse shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. Longhorn paid Cattleman's $95,000 to acquire it. Longhorn should record goodwill on this purchase of:

A) $3,600.
B) $5,000.
C) $20,000.
D) $23,600.

Question 40

Woods Company made an ordinary repair to a delivery truck at a cost of $500. Woods' accountant debited the asset account, Equipment. Was this treatment an error, and if so, what will be the effect on the financial statements of Woods?

A) No, the repair was accounted for correctly.
B) Yes, the error overstated assets and net income.
C) Yes, in the years following, net income will be overstated.
D) Yes, the error understated net income.

Question 41

Career Services, Incorporated sold some office equipment for $52,000 on December 31, 2012. The journal entry to record the sale would include which of the following if the original cost of the equipment was $80,000 with a residual value of $5,000 and a useful life of 10 years? Assume the machine was purchased on January 1, 2009 and depreciated using the straight-line method.

A) Gain of $2,000.
B) Loss of $9,500.
C) Gain of $9,500.
D) Loss of $2,000.

Question 42

Shasta Exploring purchases a piece of equipment on January 1, 2012, for $50,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be $4,000. Assuming Shasta uses the double-declining balance depreciation method, what is the depreciation expense for the equipment for 2013?

A) $9,200.
B) $9,040.
C) $12,000.
D) $11,040.

Question 43

Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash. Alliance should record:

A) a gain of $5,000.
B) a loss of $5,000.
C) neither a gain or a loss since the computer was sold at its book value.
D) neither a gain nor a loss since the gain would not be recognizeD.$120,000/4 = depreciation of $30,000 per year. After three years, the book value would be [$120,000 - ($30,000 x 3 years)] = $30,000. The asset was sold for $25,000 or a $5,000 loss below book value.

Question 44

On January 1, 2010, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2012, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2012?

A) Gain, $22,000.
B) Loss, $18,000.
C) Gain, $5,000.
D) Loss, $3,000.

Question 45

Which of the following intangible assets is not amortized?

A) Patents.
B) Copyrights.
C) Franchises.
D) Goodwill.

Question 46

Berry Co. purchases a patent on January 1, 2012, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the carrying value of the patent on December 31, 2013?

A) $21,000
B) $33,000
C) $24,000
D) $26,000

Question 47

Which of the following statements is true regarding the amortization of intangible assets?

A) The expected residual value of most intangible assets is zero.
B) The service life of an intangible asset is always equal to its legal life.
C) Intangible assets with a limited useful life are not amortized.
D) In recording amortization, an accumulated amortization account is always used.

Question 48

A machine has a cost of $15,000, an estimated residual value of $3,000, and an estimated useful life of four years. The machine is being depreciated on a straight-line basis. At the end of the second year, what amount will be reported for accumulated depreciation?

A) $9,000.
B) $6,000.
C) $7,500.
D) $3,000.

Question 49

Abbott Company purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. Abbott should record:

A) a gain of $1,000.
B) a loss of $1,000.
C) neither a gain nor a loss - the computer was sold at its book value.
D) neither a gain nor a loss - the gain that occurred in this case would not be recognizeD.$10,000/5 = depreciation of $2,000 per year. After four years, the book value would be $10,000 - ($2,000 x 4 years) = $2,000. The asset was sold for $3,000 or a $1,000 gain over book value.

Question 50

A building was purchased for $50,000. The asset has an expected useful life of 6 years and depreciation expense each year is $8,000 using the straight-line method. What is the residual value of the building?

A) $0.
B) $2,000.
C) $4,000.
D) $6,000.

Question 51

Bricker Enterprises purchased a machine for $100,000 on October 1, 2012. The estimated service life is ten years with a $10,000 residual value. Bricker records partial-year depreciation based on the number of months in service. Depreciation expense for 2012, using straight-line, is:

A) $1,500.
B) $7,500.
C) $2,250.
D) $2,500.

Question 52

During 2012 and 2013, Supplies, Inc. drove the truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck at the beginning of 2012 for $175,000. If the truck has an estimated life of 10 years and 300,000 miles, with an estimated residual value of $25,000, what amount of depreciation expense should Supplies, Inc. record in 2013 using the activity method?

A) $11,000.
B) $18,500.
C) $7,500.
D) $16,000.

Question 53

Gains on the sale of fixed assets for cash:

A) Are the excess of the book value over the cash received.
B) Are recorded as a debit.
C) Are reported on a net-of-tax basis if material.
D) Are the excess of the cash received over the book value.

Question 54

Schager Company purchased a computer system on January 1, 2012, at a cost of $40,000. The estimated useful life is 10 years, and the estimated residual value is $5,000. Assuming the company will use the double-declining-balance method, what is the depreciation expense for the second year?

A) $8,000.
B) $7,000.
C) $5,600.
D) $6,400.

Question 55

Berry Co. purchases a patent on January 1, 2012, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the amortization expense for the year ended December 31, 2013?

A) $0.
B) $8,000.
C) $16,000.
D) $40,000.

Question 56

Bricktown Exchange purchases a copyright on January 1, 2012, for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assuming the company uses the straight-line method, what is the amortization expense for the year ended December 31, 2012?

A) $0.
B) $2,000.
C) $3,333.
D) $10,000.

Question 57

Using the double-declining balance method, the book value at December 31, 2013 would be:

A) $21,600.
B) $24,800.
C) $36,000.
D) $45,600.

Question 58

Crestview Estates purchased a tractor on January 1, 2012, for $65,000. The tractor's useful life is estimated to be 30,000 miles and has a residual value of $5,000. If Crestview used the tractor 5,000 miles in 2012 and 3,000 miles in 2013, what is the balance for accumulated depreciation at the end of 2013 using the activity method?

A) $38,000.
B) $6,000.
C) $16,000.
D) $10,000.

Question 59

Nanki Corporation purchased equipment at the beginning of 2012 for $650,000. In 2012 and 2013, Nanki depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual value. In 2014, due to changes in technology, Nanki revised the useful life to a total of six years (four more years) with zero residual value. What depreciation expense would Nanki record for the year 2014 on this equipment?

A) $108,333.
B) $106,667.
C) $122,500.
D) $81,667.

Question 60

ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was six years with a residual value of $20,000 and ABO uses straight-line depreciation, which of the following is true regarding the entry to record the sale of the truck?

A) Credit Gain $5,000.
B) Debit Loss $5,000.
C) Credit Accumulated Depreciation $40,000.
D) Credit Truck $100,000.

Question 61

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. The return on assets for the year is 10%. What is Hidden Valley's net income for the year?

A) $5,000,000.
B) $55,000.
C) $5,500,000.
D) $50,000.

Question 62

Land improvements are recorded separately from the land itself because, unlike land, these assets are subject to depreciation.

Question 63

The return on assets is calculated as:

A) Net Income divided by total assets.
B) Net Income divided by average total assets.
C) Net Income divided by ending total assets.
D) Ending total assets divided by net income.

Question 64

In testing for recoverability of an operational asset, an impairment loss is required if the:

A) Asset's book value exceeds the present value of its expected future cash flows.
B) Expected future cash flows exceeds the asset's book value.
C) Present value of expected future cash flows exceeds its carrying value.
D) Asset's book value exceeds the expected future cash flows.

Question 65

We use the term capitalize to describe recording an expenditure as an expense.

Question 66

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's asset turnover?

A) 1.6 times.
B) 1.8 times.
C) 1.5 times.
D) 0.2 times.

Question 67

The return on assets is equal to the:

A) Profit margin plus asset turnover.
B) Profit margin minus asset turnover.
C) Profit margin times asset turnover.
D) Profit margin divided by asset turnover.

Question 68

Wilson Inc. owns equipment for which it paid $70 million. At the end of 2012, it had accumulated depreciation on the equipment of $12 million. Due to adverse economic conditions, Wilson's management determined that it should assess whether an impairment should be recognized for the equipment. The estimated future cash flows to be provided by the equipment total $60 million, and its fair value at that point totals $50 million. Under these circumstances, Wilson:

A) Would record no impairment loss on the equipment.
B) Would record an $8 million impairment loss on the equipment.
C) Would record a $20 million impairment loss on the equipment.
D) Would record a $2 million impairment loss on the equipment.

Question 69

Maple Inc. has the following information regarding its assets: $$\begin{array} { | l | l | l | l | } \hline & \begin{array} { l } \text { Book } \\\text { Value }\end{array} & \begin{array} { l } \text { Estimated } \\\text { Cash Flows }\end{array} & \begin{array} { l } \text { Fair } \\\text { Value }\end{array} \\\hline \text { Equipment } & \$ 35,000 & \$ 30,000 & \$ 28,000 \\\hline \text { Building } & \$ 68,000 & \$ 70,000 & \$ 65,000 \\\hline \text { Patent } & \$ 30,000 & \$ 34,000 & \$ 32,000 \\\hline\end{array}$$ What amount of loss should be recorded due to asset impairments?

A) $10,000
B) $9,000
C) $8,000
D) $7,000

Question 70

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's return on assets?

A) 10%.
B) 20%.
C) 160%.
D) 18%.

Question 71

Leonard's Jewelry owns a patent with a carrying value of $50 million at the end of 2012. Due to adverse economic conditions, Leonard's management determined that it should assess whether an impairment should be recognized for the patent. The estimated future cash flows to be provided by the patent total $43 million, and its fair value at that point totals $35 million. Under these circumstances, Leonard:

A) Would record no impairment loss on the patent.
B) Would record a $7 million impairment loss on the patent.
C) Would record a $15 million impairment loss on the patent.
D) Would record a $31 million impairment loss on the patent.

Question 72

Cash received from the sale of salvaged materials increases the total cost of land.

Question 73

Recognition of impairment for long-term assets is required if book value exceeds:

A) Original cost.
B) Fair value.
C) Future cash flows.
D) Accumulated depreciation.

Question 74

Accounting for impairment losses:

A) Involves a two-step process for recoverability and measurement.
B) Applies only to depreciable, operational assets.
C) Applies only to assets with finite lives.
D) All of the other answers are correct.

Question 75

C-Stop reports the following information at year-end: $$\begin{array} { | l | r | r | r | } \hline & { \text { Estimated } } & \\& { \text { Book Value } } & \text { Cash Flows } & { \text { Fair Value } } \\\hline \text { Building } & \$ 500,000 & \$ 380,000 & \$ 360,000 \\\hline \text { Patent } & \$ 35,000 & \$ 40,000 & \$ 38,000 \\\hline \text { Copyright } & \$ 40,000 & \$ 38,000 & \$ 39,000 \\\hline \text { Machine } & \$ 100,000 & \$ 120,000 & \$ 85,000 \\\hline\end{array}$$ Based on the above information, what is the total amount of impairment loss that C-Stop should record at year end?

A) $141,000.
B) $126,000.
C) $123,000.
D) $122,000.

Question 76

Oregon Adventures purchased equipment at the beginning of 2012 for $80,000. They sold the equipment at the end of 2014 for $45,000. If the expected life of the equipment was seven years with a residual value of $10,000, and they use straight-line depreciation, which of the following is true regarding the entry to record the sale of the equipment?

A) Debit Loss $5,000.
B) Credit Gain $5,000.
C) Credit Accumulated Depreciation $40,000.
D) Credit Equipment $5,000.

Question 77

We record a long-term asset at its cost less all expenditures necessary to get the asset ready for use.

Question 78

The amount of impairment loss is the excess of book value over:

A) Carrying value.
B) Future cash flows.
C) Fair value.
D) Future revenues.

Question 79

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's profit margin?

A) 10%.
B) 12.5%.
C) 18%.
D) 22%.

Question 80

The CEO, as head of the company, is ultimately responsible for the firm's accounting.