Multiple choice

1. The factor that is not relevant in computing depreciation is

 salvage value. 

useful life.

 replacement value. 

cost.

2. Lincoln Company sells 600 units of a product that has a one-year warranty on parts. 

The average cost of honoring one warranty contract is $50. During the year 30 contracts are honored  at a cost of $1,500. It is estimated that 60 contracts will be honored in the following year. The adjusting  entry at the end of the current year will include a 

debit to Warranty Expense for $4,500. 

credit to Estimated Warranty Liability for $3,000. 

credit to Estimated Warranty Liability for $4,500. 

debit to Warranty Expense for $1,500.

3. The paid absence that is most commonly accrued is 

voting leave. 

vacation time. 

maternity leave.

 disability leave.

4. Most companies pay current liabilities 

by issuing stock. 

by creating long-term liabilities.

out of current assets. 

by issuing interest-bearing notes payable.