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Accounting
| Question | Answer |
|---|---|
| What is a long-term asset? | An asset that will NOT be consumed or converted to cash within the next year. |
| What is a short-term asset? | An asset that WILL be consumed or converted to cash within the next year. |
| Examples of long-term or non-current assets: | Property, plant, equipment, intangibles |
| Examples of short-term or current assets: | Cash, prepaid expenses, accounts receivable |
| Property, plant, and equipment are what type of asset? | non-current |
| Cash, prepaid expenses, accounts receivables are what types of assets? | current |
| What is the purpose of depreciation? | Cost allocation and how an asset is expensed over a period of time. |
| Straight-Line Depreciation is calculated by.... | Cost (minus) Salvage Value (over) Useful Life |
| (Cost - Salvage Value)/Useful Life is the calculation for what? | Straight-Line Depreciation |
| How do you calculate the gain/loss on sale of long-term assets? | Selling Price (minus) Book Value |
| What is the (selling price - book value)? | Gain/Loss on Sale |
| How do you calculate the book value of a long-term asset? | Historical cost (minus) Accumulated Depreciation |
| What are examples of intangible assets? | Patents, copyrights, trademarks, goodwill |
| What is the Return on Asset ratio? | Net Income (over) Average Total Assets |
| What is (Net Income/Average Total Assets)? | Return on Asset Ratio |
| What is the Asset Turnover Ratio? | Net Sales (over) Average Total Assets |
| What is (Net Sales/Average Total Assets)? | Asset Turnover Ratio |
| What is a current liability? | Liabilities that will come due within the next year |
| What is a non-current liability? | Liabilities that will come due beyond the next year |
| Debit - Interest Expense Credit - Interest Payable | Adjusting Entry to Record Interest on Notes Payable |
| When the bond coupon rate equals the market rate, the bond will sell at... | Face Value |
| When the bond coupon rate is less than the market rate, the bond will sell at..... | A discount |
| When the bond coupon rate is greater than the market rate, the bond will sell at.... | A premium |
| What happens when a contingent liability is probable and can be reasonably estimated? | RECORD |
| What happens when a contingent liability is probable but cannot be reasonably estimated? | DISCLOSE |
| What happens when a contingent liability is reasonably possible? | DISCLOSE |
| What happens when a contingent liability is remote? | NOTHING |
| What happens under the accounting equation when a company issues stock? | Increase Cash and Increase Stockholders' Equity |
| What happens under the accounting equation when a company purchases Treasury Stock? | Decrease Cash and Decrease Equity |
| Which type of accounting information focuses on the needs of internal users? | Managerial |
| Revenues are shown on which financial statement? | Income Statement |
| What does not appear on the income statement? | Unearned revenue |
| At what amount is Property, Plant and Equipment reported on the Balance Sheet? | Book Value |
| Original Cost $55,000. Accumulated Depreciation $35,000. What is the book value of the asset? | $20,000 (historical cost minus accumulated depreciation) |
| Is a bond payable a current or non-current liability? | non-current |
| How do you report a contingent liability that is remote? | Do nothing |
| How do you report a contingent liability that is probable but you can't estimate the amount? | Disclose only |
| How is treasury stock classified on the balance sheet? | As a reduction to owner's equity |
| How does the payment of a dividend impact the accounting equation? | Decrease assets, decrease owners' equity |
Created by:
jenna.dorr
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