Week Two Discussion Questions 1
· What are the differences among valuation, depreciation, amortization, and depletion? Is it appropriate to calculate depreciation using two different methods? Why?
· Which depreciation method provides you with the highest depreciation expense in the first year? Why?
· What types of industries have unearned revenue? Why is unearned revenue considered a liability? When is the unearned revenue recognized in the financial statements?
· Why do companies issue bonds? Would you rather buy a bond at a discount or a premium rate? Why? What is the determining factor of whether a bond is sold at a discount, face value, or premium?
· What is the straight-line method of amortizing discount and premium on bonds payable? Provide an explanation of the process.
· How would you describe the accounting procedures for notes payable and accounts payable?