Afq

Inflation ___________________ the value of money (the dollar).

decreases

Historical cost is adjusted each year based on the wear and tear of an item. This adjustment is shown in which account?

depreciation

contributed capital

amounts individuals have paid directly to the organization in stocks or bonds

Internal control means the system is designed to catch and correct errors:

automatically

Financial Accounting looks

backward

Which financial statement is a "snapshot" of the organizations financial health?

balance sheet

The historical cost of an item less the accumulated depreciation of the item is known as:

book value

Using cash to purchase an asset like new equipment, is defined as:

capitalization

Given: $24,000 was collected from previously billed patients. What would be the two accounts effected in this transactions?

cash accounts recievable

Cash accounting would recognize a transaction when:

cash received for services wages are paid a loan is taken for new machinery cash paid for supplies

Consideration should be given to risks the organization faces.

conservatism

Use of the same accounting method from period to period

consistency

Accounts receivable net is gross charges less what items?

contractual allowance bad debt

Net Patient Services Revenue is what the organization is legally entitled to collect. Original charges are reduced by:

contractual allowances charity care discounts

The value of what was given up to acquire the item.

cost

Refers to a period of less than one year:

current near-term short-term

What are the 3 types of cash flows shown on the Statement of Cash Flows?

financing operating investing

Managerial Accounting looks

forward

Reports should disclose any information needed to ensure that they are fair representations

full disclosure

Statements are prepared based on assumption of longevity. If that is not likely the case then it must be disclosed.

going concern

What are three causes of Demand Inflation?

government regulation monopolies wage increases

GAAP requires assets such as Property, Plant and Equipment to be based on what type of cost valuation method?

historical cost

asset classification

refers to the liquidity of the account

liability classification

refers to whether an account is current or long-term

What are the GAAP principles - match the principle with the definition.

see other quizlet

Viability is measured by [ans1] and [ans2]. Pick 2

solvency liquidity

The _____________________ shows where an organization generates its cash and uses it over the accounting period.

statement of cash flows

What is the term for a claim that an outside investor has on an organization.

stockholder's equity

The users of financial statements are:

suppliers investors bankers stockholders

fiscal year

the 12 month time-frame an organization chooses based on seasonal influences

Net Assets (equity) is the cash an organization has to invest for its future.

false

Nominal accounts are zeroed out after the reporting year has ended.

false

Owners equity and net assets are the same thing in accounting terminology

true

The SEC is concerned with correct arithmetic and consistent accounting practices.

true

The Statement of Operations and the Income Statement are the same document?

true

The accounting equation must always remain in balance

true

The difference between Notes Payable and Accounts Payable is repayment time

true

Using the accrual method of accounting will require a Statement of Cash flows.

true

Whether for profit or not-for-profit, health organizations need profits.

true

Organizations must always have enough cash on hand to pay off stockholder's equity.

false

The strength of historical cost valuation is that it is objective and verifiable.

false

unrestricted net assets

profits generated from daily operations as well as unrestricted donations

fixed assets

property, plant and equipment

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the profit using the FIFO costing method?

$1360?

No matter which depreciation schedule is used the journal entries for the initial purchase will remain the same.

true

Given a beginning inventory of 10 units @ $4/each the following purchases were made:10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/each. What is the inventory valuation based on LISH?

$111.00

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the profit difference between LIFO and FIFO methods for this problem?

$112.00

Purchased: 1/15 2units @ $75.00/each6/15 2 units @ $150.00/each8/15 1 unit @ $80.00/each10/15 1 unit @ $100/each Using specific identification if 3 units were sold for $500/each what would be the profit generated?

$1200

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using the Weighted Average Method?

$1,213.25

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/piece What is the revenue generated?

$1,250

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the average price per unit?

$10.55

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the inventory valuation based on FISH for the year?

$106.00

A piece of equipment was purchased on 1/1/20X1. It has a useful life of 5 years and salvage value of 10%. Accumulated depreciation amounted to $100,000 on 12/31/20X5. What was the purchase price (historical cost) of the item?

$111,111.00

Jerry bought a new tractor for $40,000 for his landscaping business. He thinks it will last him 5 years at which time he will sell if for scrap for $750.00. Using the Double Declining Balance method of depreciation what is his depreciation expense for years 1 and 3 respectively?

$16,000 and $5,760

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Revenue from this transaction?

$2,875.00

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the inventory valuation using LISH?

$218.00

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/eachIf 50 units were sold @ $25.00/each. Using FIFO what is the cost of goods sold?

$227.50

Using the information from the SYD problem Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000 What is the accumulated depreciation through year 3?

$256,000.00

Jones Services bought a new building on 9/15/20X1 for $950,000 with a Salvage Value of $50,000 and Useful Life of 30 years. The land was valued at $275,000. Using the Straight Line method of depreciation what is the book value of the land in 20X5?

$275,000. Land doesn't depreciate

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the straight line depreciation amount per year?

$28,125/year

Given: Purchase of new technology for $65,000 Building remodel for new technology of $230,000 and Sales Tax of 6,500 and Commission of $5,500 what is the historical cost of this item?

$307,000

Given Liabilities of $185,000 and Equity of $205,000 what are Assets:

$390,000

A piece of equipment was purchased for $65,000 on 1/1/20X1 and has a salvage value of 20% and expected useful life of 10 years. Using the DDB method of depreciation, what is the book value of the item end of year 2 (beginning of year 3)?

$41,600

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Using FIFO - what is the COGS for the year?

$412.00

A piece of equipment was purchased for $65,000 on 1/1/20X1 and has a salvage value of 20% and expected useful life of 10 years. What is the straight line depreciation amount per year?

$5,200

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the sum of digits amount of depreciation for year 1?

$50,000

Given that you purchased equipment for $90,000 and then it has depreciated over the years in the amount of $40,000. What is the book value of the equipment?

$50,000

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Using LIFO what is the COGS for the year?

$524.00

Given Revenue of $75,000 and Profit of $15,000 what were Expenses over the given period?

$60,000

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the double-declining balance depreciation amount for year 1?

$62,500

Using the Sum of Years Digits method find the depreciation in year 3 for the following: Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000

$64,000.00

Again using the same information from the SYD problem Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000 What would be the book value of the item after 3 years of SYD depreciation?

$69,000

Given a beginning inventory of 10 units @ $4/each the following purchases were made:10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/each. What is the inventory valuation using FISH?

$71.50

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What was the revenue generated over the year?

$806.00

The "near term", "short-term" or "current" in accounting means [ ] or less.

12 months

There are how many methods to calculate the Statement of Cash Flows?

2

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each How many units are left on the shelves?

30

Given a beginning inventory of 150 units the organization bought 750 units and sold 500 units @ $20/each. What is the ending balance?

400 units

Given the terms: 5/15 net 30 what would be the discount from the vendor if paid immediately after receipt of invoice?

5 percent

The fundamental accounting equation is:

Assets = Liabilities + Equity

balance sheet

Indicates financial position of an organization at a specific point in time

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Which method - LIFO or FIFO gives the better tax advantage to the organization?

LIFO

The idea that one will not be able to replace inventory items for lower costs because of inflation is the basis of which inventory costing method?

LIFO

When using "mark-to-market" valuation which GAAP method is preferred?

Level 1

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using the LIFO method?

NOT$1,110

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using FIFO method?

NOT$1,360.00. $1110?

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the FISH value?

NOT$145.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the LISH value?

NOT$170

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the profit using the LIFO costing method?

NOT$1765.00

The Sarbanes-Oxley Act:

Requires disclosure of conflicts of interest Provides protection for whistleblowers Requires periodic rotation of auditors

Non-profits have to have CPA audited financial statements.

true

Depreciation is a known "tax shelter" and is completely "legal"

True

Please complete Journal entries and Worksheet for the following: France Healthcare System had the following balances and transactions: Assets of $725,000 Liabilities of $125,000 and Equity of $600,000 1. Charged patients for services in the amount of $175,000 2. Purchased $60,000 of supplies on account 3. Collected $75,000 on patient accounts 4. Paid wages and salaries of $125,000 5. Purchased land with a loan of $150,000 6. Paid $6,000 on the mortgage 7. Paid $9,000 in interest 8. Ordered a new Xerox machine for $60,000 9. Received $50,000 in rental income 10. Paid insurance coverage of $3,500

What is the journal entry for #1? A/R $175k Credit RSR $175k Debit For #2 there is a debit to what account? Inventory For #3 both accounts effected are: Assets For #4 Cash is debited False After all transactions the company showed a profit of: $87,500 Assets increased or decreased over this reporting period Increased Liabilities went up or down during this reporting period? Up The new Asset total after all transactions is: $1,016,500 There is no transaction for #8. True Revenue over the reporting period is: $225,000

The Journal entry for: Patients were billed $25,000 for services rendered during the month. would entail which two accounts?

accounts receivable and routine services revenue

Using the same information: Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value Which of the three methods gives you the MOST depreciation expense in the first year?

double declining balance

The unit for which we wish to account. This can be a person, department, project, division or organization. It is defined as an:

entity

Stock and bonds that an entity invests in are valued on the balance sheet using which valuation method?

fair value accounting

A "certified statement" means the documents reviewed are error free and correct.

false

A good strategy is to maximize an organizations liquidity and solvency.

false

A system of checks and balances make it easy to defraud and embezzle from an organization.

false

An auditor reviews all documents to determine accuracy.

false

Cash is increased by a credit and decreased by a debit.

false

Charges are the same as revenues in accounting.

false

Current assets and liabilities at the top of the balance sheet gives the reader a quick assessment of solvency.

false

Depreciation expense and accumulated depreciation are the same in types of accounts in accounting.

false

Depreciation is the same as money in the bank.

false

Equity is the amount of money I have in the bank (cash) after I account for my assets and liabilities.

false

Financial statements are the responsibility of the auditor or CPA

false

Given the following journal entry: Employees were paid wages of $75,000 during the period there would be a credit to wages and salaries expense account

false

I want to use the future profits valuation to determine how much insurance coverage I should have on an entity.

false

If providers give away care (free or charity), they can include the amount they would have charged as revenue.

false

Most undetected fraud is "material" in accounting.

false

retained earnings

income earned by an organization over the years that was not distributed

This type of asset results in substantial valuation difficulties because it has no physical form.This type of asset results in substantial valuation difficulties because it has no physical form.

intangible assets

A _____________________ combines account balances from the beginning of the reporting period as well as journal entries for that recording period.

ledger

Obligations of the organization to outside creditors.

liabilities

________________________ protects owners of a corporation from being personally liable for the debts of the corporation.

limited liability

Assets are presented on the Balance sheet in order of:

liquidity

Non-profits need to disclose how liquid their organization is.

true

Expenses should be recorded in the same period as the revenues they were responsible for generating

matching

If an individual would make a different decision based on the incorrect information resulting in an error

materiality

The first item listed on healthcare financial statements and reflects the adjustments of charity care and contractual adjustments is known as:

net patient services revenue

Given: Placed an order for a new truck in the amount of $85,000. Entity has applied for a loan in this amount. What are the accounts effected?

none of the above bc the order hasn't been placed

Based on evidence that reasonable individuals would agree upon

objective evidence

long-term liabilities

obligations due that will take over a year to repay

The ___________________shows revenues and expenses over the entire accounting period.

operating statement

income statement

presents changes in equity of a period of time

Insurance companies and government agencies that pay the majority of the cost of treating patients are known as:

third party payers

All elements of a financial event are known as:

transaction

Accrual accounting is much less open to manipulation of profits.

true

Accumulated depreciation is a contra-asset account.

true

All stock for an organization should at least be initially issued for the par value to reduce owner liability.

true

Delaying or accelerating payments will not impact expenses if using accrual based accounting.

true

Depreciation expense gets zeroed out after a financial reporting period for an organization.

true

Double entry means that it is not possible to change one side of the accounting equation without changing the other.

true

Fraud usually makes no difference or impact on an organization's Balance Sheet.

true

Higher risk ventures should bring higher returns.

true

Inventory is less liquid than receivables.

true

Inventory management is the movement of products in stock and should always use the FIFO method no matter the costing method used.

true

Marketable securities are current assets.

true

Net Realizable Value is based on someone's subjective estimate of what the entity could be sold for.

true