Final

On January 1, a machine with a useful life of 5 years and a residual value of $# was purchased for $#

$18,000

Double declining method How do you calculate using double declining method

...

What are the differences between the percentages of sales method and the aging of receivables...

....

What is the revenue recognition principal?

....

Which of the following statements best describes the term "Outstanding Check" from a company's point of view?

A check written by the company but not yet presented to the bank for payment

What type of account is allowance for doubtful accounts?

A contra asset account

Who is (according to the Sarbanes-Oxley Act) primarily responsible for internal controls in a ...

A. Management of the company

What is the Accounting Equation?

Assets= Liabilities + Stockholders' Equity

Which one of the following financial statements reports an entity's financial position at a specific date?

Balance Sheet

Where are current assets listed?

Balance sheet

How to calculate interest on bonds sold at discount using the effective interest method?

C. At a discount. The effective interest rate is more than the stated rate or The effective interest rate times the amount of the debt outstanding during the interest period

The account which records differences between amounts of each deposited and amounts from the .. register tapes is called

Cash Over and Short

What is the definition of a current asset?

Cash and other assets that are reasonably expected to be converted into cash within one year or one operating cycle, whichever is longer

An entry made to the right side of an account is always a

Credit

The correct term for the entry made on the left side a T-account is

Debit

Cash collected and recorded by a company but not yet reflected in a bank statement is known as

Deposits in transit

Which inventory results in higher ending inventory?

FIFO

Accured expenses originate from

Incurring expenses without yet having paid cash for them

The chronological record in which transactions are initially recorded in the order in which they occur is called

Journal

A check returned by a bank because the customer's cash account balance could NOT cover the check is called a:

NSF check

Which of the following is an example of a debit memo?

Notice of a bank service charge

Which of the following is an example of a credit memo?

Notice of interest earned on a checking account

An incentive used by a company to induce the customer to keep damaged goods is called a:

Sales allowance

All of the following accounts have normal debit balances except All of the following accounts have normal credit balances except

Service Revenue Inventory

The asset account, Supplies, has a balance of $10,000 on January 1. During January, $22,000 of supplies were purchased on account after the liability was appropriately recorded. A.... of supplies at the end of January ... a balance of $2,000. What adjusting entry is necessary at January 31?

Supplies Expense $30,000 Supplies $30,000

What is historical cost?

The exchange price at the time the activity occurs or.... the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company The historical cost principle requires that a company record its fixed assets at the exchange price at the time the asset is purchased

When do bonds sell at a discount?

When it has a lower interest rate than the current market rate, and consequently is sold at a lower price

How is the discount of bonds payable account shown on the balance sheet?

When it is sold at a price above par

When do bonds sell at premium?

When the bonds purchase price is in excess of par value

A machine with a cost of $240,000 has an estimated salvage value of $15,000 and an estimated useful life of 5 years or 20,000 hours. It is to be depreciated using the units-of-activity method of depreciation. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

b. $56,250 * know the formula * 240,000-15,000/20,000=11.25 x 5000

Coffski, Inc. sold merchandise to customer on credit. The invoice amount was $1,000, the invoice date was June 10th; credit terms were 1/10, n/30. Which of the following statements is true?

b. The customer SHOULD pay $1,000 if the invoice is paid on July 9th.

When the market value of inventory items has declined below their cost, which method would be the most appropriate in complying with GAAP?

c. Lower of cost or market

Depreciation is a process by which

c. THE COST of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset

The cost of goods sold is equal to:

c. the cost of goods available for sale less ending inventory

A current liability is defined as a commitment or obligation which requires a company to transfer assets, create a new current liability, or provide services to another entity at some point in the future that must occur

c. within one year or within the operating cycle, Whichever is LONGER

What is the definition of long-term debt?

consists of loans and financial obligations lasting over one year

What are the different terms not used to describe the interest rate printed on a bond certificate

d. effective rate

Which of the following sets of factors is needed to calculate depreciation on plant and equipment?

d. the estimated LIFE OF THE ASSET, its acquisition cost, and its estimated residual value

How is the current portion of long-term debt shown on the balance sheet?

is the amount of principal that will be due within one year of the date of the balance sheet

Straight-line method How do you calculate using Straight-line method

represents a simple approximation of effective interest amortization. Equal amounts of premium or discount are amortized to interest expense each period Straight-line depreciation = (cost - residual value) / Expected Useful Life