Aplia Accounting Ch.14
False
Merchandise Inventory is an asset account with a normal credit balance.
True
Most accounts needing adjustment at the end of a fiscal period have a related temporary account.
True
In order to make adjustments to federal income tax, you must first determine the net income before federal income tax expense.
False
Many business use a percentage of total sales to estimate uncollectiable accounts expense.
True
A board of directors earnings of a corporation to its stockholders by declaring a dividend.
True
A corporation's board of directors is elected by the stockholders.
False
A declared dividend is classified as en expense.
Board of Directors
A group of people elected by the stockholders to manage a corporation.
True
A stockholder is an owner of one or more shares of a corporation.
True
A work sheet is used to plan adjustments and summarize the information necessary to prepare financial statements.
False
Accounts Receivable is a contra account to its related asset account, Allowance for Uncollectable Accounts.
Uncollectible Accounts
Accounts receivable that can't be collected.
False
Accumulated depreciation is the depreciation expense that has been recoreded since the purchase of a current asset.
Declaring a Dividend
Action by a board of directors to distribute corporate earnings to stockholders.
True
An amount earned by a corporation and not yet distributed to stockholders is called retained earnings.
Retained Earnings
An amount earned by a corporation and not yet distributed to stockholders.
True
Assets that will be used for a number of years in the operation of a business are called plant assets.
Plant Assets
Assets that will be used for a number of years in the operation of a business.
Current Assets
Cash and other assets expected to be exchanged for cash or consumed within a year.
Straight-Line Method of Depreciation
Charging an equal amount of depreciation expense for a plant asset in each year of useful life.
Allowance Method
Crediting the estimated value of uncollectible account to contra account.
True
Depreciation accumulates each year of a plant asset's useful like.
False
Dividends are earnings retained by the corporation.
False
During a fiscal period, the amount of merchandise on hand remains unchanged.
False
Each unit of ownership in a corporation is known as a stock holder.
Dividends
Earnings distributed to stockholders.
True
Federal income tax is an expense of a corporation.
False
General Ledger account balances are changed when adjustments are entered on the work sheet.
False
Owner's equity accounts for a corporation normally are listed under a major chart of accounts division titled Operating Expense
Accumulated Depreciatino
The total amount of depreciation expense that has been recorded since the purchase of a plant asset.
False
The adjustment for merchandise inventory is common for all businesses.
True
The ammount of federal income tax expense a corporation must pay is calculated using a tax table furnised by the Internal Revenue Service.
Estimated Salvage Value
The amount an owner expects to receive when a plant asset is removed from use.
Merchandise Inventory
The amount of goods on hand for sale to customers.
False
The difference between an asset's account balance and it's related contra account balance is called par value.
Book Value
The difference between an asset's account balance and its related contra account balance.
Book Value of Accounts Receivable
The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible accounts
True
The dividends account has a normal debit balance and is increased by a debit.
False
The supplies--store account must be adjusted to show the value of insurance that has been prepaid.
Book Value of a Plant Asset
The original cost of a plant asset minus accumulate depreciations.
Depreciation Expense
The portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life.
False
The prepaid insurance account is adjusted to show the value of insurance that has been prepaid.
True
The risk of uncollectible accounts should be recorded as an expense in the same acounting period that the revenue is earned.
False
The steps for preparing a work sheet are very different for proprietorships and corporations.
False
When a corporation makes the quarterly payment of the estimated federal income tax, the cahse account is debited.
False
When a declared dividened is paid, Dividends Payable is credited.