Finals

The calculation for annual depreciation using the units-of-activity method is

(Depreciation cost/Estimated Output) * Actual Yearly Output

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

debit Accounts Payable; credit Notes Payable

When a company receives an interest-bearing note receivable, it will

debit Notes Receivable for the face value of the note

Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written off would include a

debit to accounts receivable

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

defined contribution

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

depletion

Two methods of accounting for uncollectible accounts are the

direct write-off method and the allowance method

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

dishonored

Current Liabilities are

due and to be paid out of current assets within one year

Expected useful life is

estimated at the time that the asset is placed in service

The amount for which a promissory note is written is called the

face value

Most employers are levied a tax on payrolls for

federal unemployment compensation tax

Which of the following is an example of a variable component of a payroll system?

hours worked

A debit balance in the Allowance for Doubtful Accounts

indicates that actual bad debt write-offs have exceeded previous provisions for bad debts

The formula for depreciable cost is

initial cost - residual value

Land acquired so it can be resold in the future is listed in the balance sheet as a(n)

investment

Accumulated Depreciation

is a contra asset account

The direct write-off method of accounting for uncollectible accounts

is often used by small companies and companies with few receivables

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

is used primarily by small companies with few receivables

Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

matching concept

The amount of the promissory note plus the interest earned on the due date is called the

maturity value

Residual value is also known as all of the following except

net book value

Payroll entries are made with data from the

payroll register

The cost of a product warranty should be included as an expense in the

period of the sale of the product

When a borrower receives the face amount of a discounted note less the discount, the amount is known as

the note proceeds

A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable

there is no effect on total current assets or total expenses

An aid in internal control over payrolls that indicates employee attendance is

time card

Proper payroll accounting methods are important for a business for all the reasons below except

to help a business with cash flow problems by delayed payments of payroll taxes to federal and state agencies

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

total assets decrease

Which of the following would most likely be classified as a current liability

unearned rent

Which of the following will have no effect on an employees take home pay

unemployment tax

All of the following are needed for the calculation of straight-line depreciation except

units produced

One of the weaknesses of the direct write-off method is that it

violates the matching principle

A current liability is a debt that is reasonably expected to be paid

within one year

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include a

A credit to Allowance for Doubtful Accounts

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account

Affects only balance sheet accounts

The process of transferring the cost of an asset to an expense account is called all of the following expect

Allocation

The balance in allowance for doubtful accounts will directly impact the end of period adjustment for bad debt expense when using the

Allowance method based on aging the receivables

A capital expenditure results in a debit to a

Asset account

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000

The accumulated depletion of a natural resource is reported in the

Balance sheet as a deduction from the cost of the resource

Allowance for Doubtful Accounts is classified as ____ accounts and has a normal___balance

Contra asset, credit

The employee's earning record would contain which of the following data that the payroll register would probably not contain

Cumulative earnings

The journal entry a company uses to record estimated product warranty liability expense is

Debit product warranty expense ; credit product warranty payable

When a company discards machinery that is fully depreciated, this transaction would be recorded as a

Debit to Accumulated Depreciation and credit to machinery

Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a

Debit to allowance for doubtful accounts

An aging of a company's accounts receivables indicates that the estimate of uncollectible accounts totals $6,400. If allowance for doubtful accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for the period will require a

Debit to bad debt expense for 7,700

When a company sells machinery at a price equal to its book value, this transaction would be recorded as

Debit to cash and accumulated depreciation and a credit to machinery

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

Debit vacation pay expense ; credit vacation pay payable

A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a

Defined benefit plan

The calculation for annual depreciation using the straight-line depreciation method is

Depreciable cost/Estimated useful life

The detailed record indicating the data of each employee for each payroll period and the cumulative total earnings for the each employee is called

Employees earnings record

Which of the following taxes are employers required to withhold from employees

FICA tax

Which of the following taxes would be deducted in determining an employee's net pay

FICA taxes

The total earnings of a payroll period is referred to as

Gross pay

Indications that an account may be uncollectible include all of the following except the customer

Is making small but regular payments

In a lease contract, the party who legally owns the asset is the

Lessor

The amount of federal income taxes withheld from an employee's gross pay is recorded as a

Liability

Current assets are usually listed in order

Of liquidity

Which of the following is true?

Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same

Which of the following is an example of a capital expenditure?

Replacing an engine in a company car

The accumulated depletion account is

Reported on the balance sheet as a deduction from the cost of the mineral deposit

A fixed asset's estimated value at the time it is to be retired from service is called

Residual value

Which of the following is not a determinant in calculating federal income taxes withheld from an individual's pay?

Type of earnings

Which of the following forms is typically given to employees at the end of the year so that employees an file their individual income tax forms?

Wage and tax statement (Form W-2)

Which of the following would be used to compute the federal income taxes to be withheld from an employee earnings?

Wage bracket and withholding table

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

accounts receivable

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

allowance for doubtful accounts

Payroll taxes levied against employees become liabilities

at the time the liability for the employee's wages is paid.

The current portion of long-term debt should

be reclassified as a current liability

Which of the following is included in the cost of land?

brokerage commission

Fixed assets are ordinarily presented in the balance sheet

cost less accumulated depreciation

Vacation pay payable is reported on the balance sheet as a(n)

current liability or long-term liability, depending upon when the vacations will be taken by employees