ACCT exam 4

Patents to produce and sell inventions are conveyed by the federal government for a period of:

70 years. 20 years. 50 years. time that is agreed upon by the company.

When a company settles a warranty claim by replacing the defective goods, the journal entry will include a debit to _______ and a credit to _______.

Warranty Expense, Cash Warranty Expense, Inventory Estimated Warranty Payable, Cash Estimated Warranty Payable, Inventory

During the month, Southeast Plumbing paid $600 to settle warranty claims. Southeast uses an estimated warranty account. The journal entry to record the payment would have been:

debit Estimated warranty payable, $600; credit Warranty expense, $600. debit Warranty expense, $600; credit Estimated Warranty payable, $600. debit Estimated warranty payable, $600; credit Cash, $600. debit Warranty expense, $600; credit Cash, $600.

When a company makes a sale, sales tax is collected from the customer. The company records sales tax as a(n):

estimated liability. contingent liability. accrued liability. known liability.

Contingent liabilities may be classified as:

long-term liabilities only. notes in the financial statements only. current liabilities only. either current or long-term liabilities.

The need to create an estimated warranty liability arises from the ________ principle.

matching conservatism objectivity entity

Patents, copyrights, and trademarks are:

amortized. depleted. depreciated. expensed

An obligation dependent upon an event that has not yet occurred is an example of a(n):

contingent liability. estimated liability. known liability. accrued liability.

A major difference between Accounts Payable and Notes Payable is that

only Accounts Payable are classified as current assets. only Notes Payable charge interest. Notes Payable are only used for receiving cash. Notes Payable are only long-term assets

A major difference between Accounts Payable and Notes Payable is that:

only Accounts Payable are classified as current assets. only Notes Payable charge interest. Notes Payable are only used for receiving cash. Notes Payable are only long-term assets.