AIPB Depreciation study guide exam quizzes

(True or False) Whether a company uses GAAP rules or tax rules to compute depreciation recorded in the financial statements depends on how the company uses its financial statements - True (True of False) If a company's year-end financial statements are to be reviewed or audited by a CPA, the depreciation amount for the statements is generally computed under GAAP rules. - True (True of False) Even if a company's tax and GAAP depreciation expense are not materially different, a CPA conducting an audit will require the company to use the amount computed under GAAP. - False The adjusting entry to record $5,000 of depreciation expense in the general ledger is: - Depreciation Expense $5,000 Accumulated Depreciation Expense $5,000 Which of the following does not require using an independent CPA? a. An audit of company financial statements b. Preparation of the company tax return c. A review of the company's financial statements d. An opinion on whether the financial statements materially conform to GAAP rules. - b. Preparation of the company tax return If a company is required to have an audit of its financial statements, then a. GAAP depreciation must be the same as tax depreciation b. If GAAP depreciation is materially different from the tax depreciation the company must use the GAAP amount for its financial statements and the tax amount for it tax return c. GAAP depreciation must always be used for the company's financial statements even if tax depreciation is not materially different