Accounting Chapter 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.
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.
False
Accumulated depreciation is the depreciation expense that has been recoreded since the purchase of a current asset.
True
An amount earned by a corporation and not yet distributed to stockholders is called retained earnings.
True
Assets that will be used for a number of years in the operation of a business are called plant assets.
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.
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
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.
False
The difference between an asset's account balance and it's related contra account balance is called par value.
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.
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.
