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ACC Test 4
Ch 7,8,9 (does not include calculations)
| Question | Answer |
|---|---|
| A ____ is a promissory (note received) from a customer in exchange for an account receivable | Note Receivable |
| A ______ is a (written promise) to pay a specified amount, usually with interest, either on demand or at a stated future date | Promissory note |
| Companies can (convert receivables) to cash before they are due with ____ | Selling Receivables |
| The (need for cash) or; the company does not want to be involved in collection activities | Selling Receivables |
| Selling Receivables also involve a ____ and ____ | Factor and Benefits to factoring receivables |
| An example of a ______ is a buyer that (charges the seller) a factoring fee and then collects the receivables as they come due | Factor |
| An example of a ______ is a (finance company) or bank that acquires ownership of another company's accounts receivable | Factor |
| A benefit to ______ is It allows the seller to receive (cash earlier) | Factoring receivables |
| A benefit to ______ is it (passes) ownership of the receivables to the factor | Factoring receivables |
| A benefit to ______ is that the seller (avoids) the cost of billing and accounting for receivables | Factoring receivables |
| A benefit to ______ is it can (pass) the risk of bad debts to the factor | Factoring receivables |
| Company (borrows money) by _______ as security | Pledging its Receivables |
| With ______, the (borrower retains) ownership of the receivables | Pledging Receivables |
| If (borrower defaults), the lender has right to be paid from receipts on accounts receivable when collected under a _______ | Pledging Receivables |
| The _________ should be disclosed in (financial statement) footnotes | Pledge (Pledging Receivable) |
| Selling Receivables also involve a ____ and ____ | Factor and Benefits to factoring receivables |
| Allowance for Doubtful Accounts are a ______ account | contra asset account |
| ______ are (used instead) of reducing accounts receivable directly | Allowance for Doubtful Accounts |
| _______ are (credited when bad) debts expense is estimated and recorded | Allowance for Doubtful Accounts |
| _______ are debited when (uncollectible accounts) are written off | Allowance for Doubtful Accounts |
| _______ is the (allowance method that assumes) a percent of a company’s credit sales for the period is uncollectible | Percent of sales |
| ________ is a (method of estimating bad debts expense) that involves classifying receivables by how long they are past due | Aging of accounts receivable |
| End of the period adjusting entry for (estimated bad debts) using the (allowance method): Dr. _______ Cr. _______ | Dr. Bad Debts Expense Cr. Allowance for Doubtful Accounts |
| To (write off) an uncollectible account when using the (allowance method): Dr. _______ Cr. _______ | Dr. Allowance for Doubtful Accounts Cr. Accounts Receivable |
| To accept a (note to replace an account receivable): Dr. _______ Cr. _______ | Dr. Notes Receivable Cr. Accounts Receivable |
| ____ are (tangible assets) used in a company’s operations that have a (useful life of more than one accounting period) | Plant assets |
| Land is an example of ______ | Plant assets |
| Land improvements are an example of ______ | Plant assets |
| Buildings are an example of ______ | Plant assets |
| Machinery is an example of ______ | Plant assets |
| Equipment is an example of ______ | Plant assets |
| _____ is the process of (allocating the cost of a plant asset) to expense while it is in use | Depreciation |
| ____, _____, ______, and _____ are relevant factors in computing depreciation | • Cost • Salvage value • Useful life • Depreciation method |
| ____ is an estimate of an (asset’s value) at the end of its useful life | Salvage value |
| The length of time it is used in a company’s operations is considered the ______ | Useful life of a plant asset |
| _____ is the (total cost of an asset) minus accumulated depreciation | Book value |
| ______, _______, and _______ are the Depreciation methods | Straight-line, Units-of-production, Declining-balance |
| _____ is the depreciation (method that charges) the same amount of expense to each period of the asset's useful life | Straight-line |
| _____ is the depreciation (method that allocates) an equal portion of the total depreciable cost for a plant asset to each unit produced | Units-of-production |
| _____ is the depreciation (method which uses a depreciation rate) that is a multiple of the straight-line rate | Declining-balance |
| Straight-line depreciation expense = | (Asset Cost – Salvage Value) ÷ Useful life in years |
| ______, _______, ______, and ______ are included in the cost of equipment | • Assembling cost • Invoice cost • Testing cost • Installing cost |
| (Assembling cost) is included in ______ | The cost of equipment |
| (Invoice cost) is included in ______ | The cost of equipment |
| (Testing cost) is included in ______ | The cost of equipment |
| (Installing cost) is included in ______ | The cost of equipment |
| The (straight-line depreciation method and the double-declining-balance depreciation method) produce the same _____ over an asset's useful life | Total depreciation |
| (Once) the _____________ for an asset is calculated, it may be revised to reflect changes in the asset’s estimated salvage value or useful life | Estimated (depreciation) expense |
| An asset is said to be ______ when (accumulated depreciation equals) the asset’s cost | Fully depreciated |
| ______ are (assets) that are (physically consumed) when used | Natural resources |
| Standing timber are considered ________ | Natural resources |
| Mineral deposits are considered ________ | Natural resources |
| Oil and gas fields are considered ________ | Natural resources |
| ______ is the process of (allocating the cost of a natural resource) to the period when it is consumed | Depletion |
| ______, _______, ______, and ______ are Intangible assets | • Patents • Copyrights • Trademarks • Goodwill |
| Patents are considered ________ | Intangible assets |
| Copyrights are considered ________ | Intangible assets |
| Trademarks are considered ________ | Intangible assets |
| Goodwill is considered an ________ | Intangible asset |
| _____ is the (allocation of the cost of an intangible asset) to expense over its estimated useful life. | Amortization |
| ____ are Liabilities that are (due within one year) (or the company’s operating cycle if longer) | Current liabilities |
| An accounts (payable) is considered a ________ | Current liability |
| _____(s) are (amounts owed to suppliers) for products or services purchased on credit | Accounts payable |
| A notes (payable) is considered a ________ | Current liability |
| A sales taxes (payable) is considered a ________ | Current liability |
| (Unearned) revenue is considered a ________ | Current liability |
| _____ are (amounts received in advance) from customers for future products or services | Unearned revenue |
| (Payroll deductions) are considered a ________ | Current liability |
| _____ are (obligations due after one year) (or the company’s operating cycle if longer) | Long-term liabilities |
| _____ is the (difference between) the amount borrowed and the amount repaid on a note payable | Interest |
| _______ is the (total compensation earned) by an employee before any deductions | Gross pay |
| FICA stands for | Federal Insurance Contributions Act |
| (Social Security) and Medicare taxes are involved with the _____ | Federal Insurance Contributions Act (FICA): |
| The _______ is (paid by both employers and employees) | Federal Insurance Contributions Act (FICA): |
| The ______ is the (Wage and Tax Statement) given to each employee annually | Form W-2 |
| _____ are an (added expense) beyond the wages and salaries earned by employees | Employer payroll taxes |
| The amount of (federal income taxes) withheld from an (employee's paycheck) is determined by... _______ and _______ | • The employee’s income • The number of withholding allowances the employee claims |
Created by:
22gonzalez
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