Answer the questions below with 'True' or 'False' and give your reasoning for your answer.

1. The book value of a building is equivalent to its historical cost.

2. The higher the accounts receivable turnover is, the faster receivables are being collected.

3. The net accounts receivable reported in the current asset section of a companys balance sheet represents all receivables expected to be collected within the next year.

4. A low inventory turnover indicates that a firm is able to sell its inventory more quickly.

5. A decline in gross profit margin can be caused by selling fewer units to customers.

6. Changes in accounting estimates affect only the current and future periods income statements.

7. Impairment of long-term plant assets is determined by comparing the sum of expected future (undiscounted) cash flows from the asset with the assets net book value.

8. Once sold, bonds can be traded in the market place similar to shares of stock.

9. Companies typically delay paying accounts payable as it represents an inexpensive form of financing.

10. Companies must report gains and losses on transactions relating to purchases and sales of their own stock as nonoperating amounts on the income statement.

11. A companys profit declines when dividends are paid because a company must recognize an expense for the amount of the dividend.

12. In addition to the ownership of a sufficient percentage of outstanding common stock, significant influence can result by virtue of legal agreements and technology licensing.

13. Unrealized gains and losses on investments classified as trading securities are reported as a component of a companys net income.

14. Land is reported on the statement of financial position at its cost less accumulated depletion, or at its fair value, whichever is higher.

15. Unearned revenues should be classified as Other Revenues and Gains on the income statement.