Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
ACCT110 E2
| Question | Answer |
|---|---|
| Receivables are usually a significant portion of | total current assets |
| A note receivable due in 90 days is listed on balance sheet under | current assets |
| two methods of accounting for uncollectable receivables are | allowance method and direct write off |
| Weakness of direct write off method | violates the matching principle |
| Allowance for doubtful accounts is listed on the balance sheet under | current assets |
| After the accounts are adjusted and closed at the end of the year, accounts receivable has a balance of $450,000 and allowance for bad debts has a balance of $25,000. What is the net realizable value of accounts receivable | $450,000-$25,000 = $425,000 |
| Allowance for doubtful accounts is listed on the balance sheet as | current assets |
| what type of account is allowance for bad debt | contra asset |
| Allowance for doubtful accounts has an unadjusted balance of $800 at the end of the year and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. What is the proper entry for doubtful accounts | Increase uncollectible accounts expense $14,200, increase allowance for doubtful accounts $14,200 |
| Allowance for doubtful accounts has an unadjusted balance of $500 at the end of the year and and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. What is the proper entry for doubtful accounts | Increase uncollectible accounts expense $14,500, increase allowance for doubtful accounts $14,500 |
| After adjustment, accounts receivable have a balance of $430,000 and allowance for doubtful accounts has a balance of $25,000. What is the net realizable value of the accounts receivable | $430,000-$25,000 = $405,000 |
| Allowance for doubtful accounts has an unadjusted balance of $1,100 at the end of the year, and doubtful accounts has balance of $12,900. What is the proper entry for doubtful accounts | Increase uncollectable accounts expense $11,800, increase allowance for doubtful accounts $11,800 |
| Allowance for doubtful accounts has an unadjusted balance of $400 at the end of the year, and uncollectable accounts expense is estimated at 1% of net sales. If net sales are $300,000, the amount of adjustment to record for doubtful accounts is | $30,000 * 0.01 = $3000 |
| The presentation of net accounts receivable on the balance sheet will be most accurate under the | estimate based on analysis of revievables |
| when an account is written off under the allowance method | the write-off is taken against the allowance account |
| The inventory method that considers the inventory to be composed of the units of merchandise acquired earliest is | last in, first out |
| inventory costing methods place primary emphasis on assumptions about | flow of costs |
| When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory method is called | first in, first out |
| Which method of cost flows is the inventory assumed to be composed of the most recent costs | first in, first out |
| the two most widely used methods for determining the cost on inventory are | fifo and lifo |
| The inventory method that assigns the most recent costs to cost of good sold is | last in, first out |
| under which method of cost flows in the inventory assumed to be composed of the most recent costs | first in, first out |
| Under which method of inventory cost flows is the cost assumed to be in the reverse order in which the expenditures were made | last in, first out |
| During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is | lifo |
| if merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is | fifo |
| merchandise inventory is being valued at cost and he price level is consistently rising, which method of costing will yield the largest gross profit | fifo |
| if merchandise inventory is being valued at cost and the price level is steadily FALLING, the method of costing that will yield the highest net income is | lifo |
| IF the cost of an item of inventory is $60 and te current replacement cost is $65, the amount included in inventory according to the lower of cost or market is | $60 |
| If the cost of an item is $70, the current replacement cost is $65, and the sales price is $85, the amount included in inventory according to the lower of cost or market is | $65 |
| Merchandise ie recorded on the balance sheet in the section entitled | current assets |
| other descriptive titles for fixed assets would include | Plant assets, PPE (property, plant, equipment) |
| Which of the following expenditures would NOT be included in the cost of an asset | vandilism |
| What are examples of expenditures that are included in the cost of an asset | Freight costs, sales tax, surveying fees |
| A company acquires some land for $80,000 to construct a new office complex. Legal fees paid were $2,300, delinquent taxes assumed were $3,400, and %5850 was paid to remove an old building which salvaged materials sold for $950. What is the cost basis land | $80,000+$2,300+$3,400+$5,850-$950=$90,600 |
| All amounts paid to get an asset in place and ready for use are refered to as | cost of an asset |
| Removal of an old building to make the land ready for its intended use is charged to | land |
| Examples of what to include in the acquisition cost of a piece of equipment | transportation costs, installation costs, testing costs prior to production |
| An example of a unfixed asset | land held for investment |
| Examples of fixed asset | equipment, buildings |
| Book value | cost - accumulated depreciation |
| salvage value has a similar meaning to | residual value and scrap value |
| depreciable cost equals | cost - residual value |
| What are characteristics of accumulated depreciation accounts | accumulated depreciation is a contra asset account, may be disclosed in the notes to a financial statement |
| Accumulated depreciation accounts do NOT represent | cash reserved for asset replacement |
| depreciation measures | the amount of asset cost allocated to expense over periods benefitted |
| Recording depreciation | decreases net income and has no effect on cash flows |
| To measure depreciation, what needs to be known | residual value, historical cost, estimated life |
| A machine was purchased for $66,000. it has a useful life of 5 years and a residual value of $6,000. What is annual depreciation expense | $60,000/5=$12,000 |
| Computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $3,000 and useful life of 5 years. determine cost of second years depreciation | $53,000/5=$10,600 |
| On September 1, a machine with a useful life of 8 years and a residual value of $5,000 was purchased for $47,000. What is depreciation expense in the year of purchase under straight-line depreciation assuming a December 31 year-end | $42,000/8=$5250 * (4/12) = $1750 |
| A machine with a useful life of 10 ears and a residual value of $4,000 was purchased for $27,000. what is annual depreciation | $23,000/10=$2,300 |
| If a fixed asset with an original cost of $18,000 and accumulated depreciation of $12,000 is sold for $15,000, the company must | recognize a gain on the income statement under other revenues |
| If a fixed asset is sold and the book value is less than the cash received, the company must | gains and losses are not recognized on the sale of fixed assets |
| A fixed asset with a cost of $30,000 and accumulated depreciation of $27,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset? | $30,000-$27500=$2500, $3500-$2500 = $1000 gain |
| A gain is recorded on the sale of fixed assets when | the assets book value is less than the cash received |
| A fully depreciated asset must be | kept on books until sold or discarded |
| A company sold a delivery truck for $18,000 cash. the truck cost $47,500, and had an accumulated depreciation of $36,000. The entry to record the sale would include | A gain of $6,500 |
| A company sold office furniture costing $16,500 with accumulated depreciation of $14,000 for $3,200 cash. The entry to record the sale would include | decrease in accumulated depreciation for $14,000 |
| The process of transferring the cost of metal ores and other materials removed from the earth to an expense account is called | depletion |
| What are examples of intangible assets | goodwill, trademarks, copyrights |
| what intangible assets are amortized over their useful life | patents |
| Intangible assets are used in operations but | lack physical substance |
| The exclusive right to use a certain name or symbol is called a | trademark |
| XYZ Company purchased a patent from ABC for $144,000. At the time of purchase the patent had been in existence for 8 years. What is the first year’s amortization? | $144,000/(20-8)=$12,000 |
| the cost of a patent should be amortized over | 20 years or economic life, whichever is shorter |
| A patent was purchased for $670,000 with a legal life of 20 years. Management estimates that the patent has an 8-year economic life. The entry to record amortization would include | a decrease in patent for $$83,750 (670,000/8) |
| Fixed assets are ordinarily presented in the balance sheet | at cost - accumulated depreciation |
Created by:
sofib