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Accouting102
Final
| Question | Answer |
|---|---|
| What is bad debt expense? | Estimate of amount of Accounts Receivable expect not to collect from month's revenue |
| What is Allowance for Doubtful Accounts? | Estimate of total receivables that you do not expect to collect. |
| What is the purpose of internal control? | Safeguard assets, ensure accurate information, ensure compliance with laws and regulations. |
| What information is found on credit reports? | Payment history, outstanding debt, length of credit history, recent inquiries, types of credit in use. |
| What are the internal control issues for payroll? | Employment Eligibility Verification, Form W-4, Form W-2, Determine employee pay, Regulations |
| How do you calculate Net Pay? | Net Pay = Gross Pay - Deductions from pay |
| How do you compute the amount of interest paid and the principal paid with monthly loan payments? | Principal X Interest rate X 1/12 = Amount of interest for month |
| What is a bond? | Borrowing very large sums by dividing load into small amounts |
| Which organizations can issue bonds? | Only corporations and government agencies |
| How do you record transactions using the accrual basis of accounting? | Revenues recorded when earned, expenses recorded when incurred. |
| What is unearned revenue? | Receive cash before providing a service. |
| What are examples of plant assets? | Building, Land, Equipment |
| What are examples of natural assets? | Oil, timber, coal |
| What are examples of intangible assets? | Copyrights, Trademarks, Patents |
| What is depreciation expense? | Pay the same amount over a certain period |
| What is accumulated depreciation? | Total depreciation expense from date of purchase to current date |
| How do you calculate depreciation expense? | The cost of an asset over it's useful life |
| How do you calculate book value? | Cost - Accumulated Depreciation = Book Value |
| How do you calculate the gain or loss of an asset? | Disposal Value - Book Value |
| How do you calculate Gross Profit? | Sales - Cost of Goods Sold = Gross Profit |
| How do you calculate Gross Profit Ratio? | Gross profit / Sales |
| Which type of business has Cost of Goods Sold? | Merchandising |
| How would you record a sales transaction, including inventory & cost of goods sold? | Increase Asset (Cash or A/R). Increase Retained Earnings (Sales Revenue). AND Decrease Asset (Inventory). Decrease Retained Earnings (Cost of Goods Sold) |
| What agency is responsible for interpreting and enforcing the tax laws? | IRS |
| What is the difference between a Regressing and Progressive tax? | REGRESSIVE = everyone pays the same. PROGRESSIVE = tax rate goes up with the more money you make |
| How do you compute the Adjusted Gross Income? | Gross Income - Adjustments = Adjusted Gross Income |
| How do you compute Taxable Income? | Adjusted Gross Income - Exemptions - Deductions = Taxable Income |
| How do tax credits affect the amount of tax a taxpayer must pay? | It's subtracted from your Tax Liability |
| What are some of the different retirement accounts? | 401k, 403b, traditional IRA, Roth IRA |
| What does tax deferred savings mean? | Adjust account for events that have already been recorded |
| What does GAAP stand for? | Generally Accepted Accounting Principles |
| What is a CPA? | Certified Public Accountant |
| What does The Concept of Adequate Disclosure mean? | Notes to financial statement that provide enough information so that an informed reader of financial statements can adequately evaluate the financial situation of an organization |
Created by:
klein-andrew
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