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