AIPB Depreciation Questions with Complete Correct Answers | Grade A+

(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 Ans: 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. Ans: 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. Ans: False The adjusting entry to record $5,000 of depreciation expense in the general ledger is: Ans: 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. Ans: 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