14.2
Which of the following is an example of an intangible asset for a manufacturer of padlocks?
a patent on titanium lock mechanism
Amounts owed to the firm by customers who bought goods and services on credit are called:
accounts receivable
Which of the following assets is NOT an example of a fixed asset for a manufacturer of road year.
cans of yellow paint for refurbishing equipment
Which of the following is the BEST example of a current asset for a university bookstore?
credit card charges by book buyers
Computers can enhance accounting by
doing all of these
The first step in the accounting cycle is to:
analyze business transaction documents
Which of the following calculations is a formal expression of the accounting equation?
assets = liabilities + owners' equity
In accounting, every transaction must be recorded as two entries. This system is called:
double-entry bookkeeping
For which of the following assets would a wholesale company use depreciation?
its warehouses
Another term for owners equity is:
net worth
Current assets, such as marketable securities and inventory, usually are expected to be turned into cash within:
one year
Fixed assets are property and buildings that a firm expects to use for more than:
one year
Which of the following is NOT one of the six steps in the accounting cycle?
paying accounts payable
______is the process of distributing the original cost of a long-term asset over useful life.
Depreciation
____is the company's ability to expense fixed assets over their useful life
Depreciation
are temporary investments of excess cash in bonds and stocks that can readily be converted into cash.
Marketable securities
Sullins Cleaning Service has purchased a new pressure washer for $18,000. Sullins Cleaning allowed to charge a portion of the company's cost during its useful life against the profits it generates. This practice is called:
depreciation
The last step in the accounting cycle is to:
analyze financial statements and management reports
The summarizes an organization's financial status at the end of an accounting period.
balance sheet