Accounting Quiz #1

Are capitalized costs run through the income statement or cash flow statement?

Let’s say we bought a $9 million piece of equipment that should last for 30 years. If we use the straight-line method of depreciation, what is the annual depreciation expense?

If you did it correct, your answer will be a six digit number (Ex: 555555)

(Don’t include commas or dollar signs in your answer)

Let’s say you are expecting to receive $1 million from a customer that just made a purchase, but you haven’t received that cash flow yet.

How would you list that $1 million expected payment on the balance sheet?