Quia True/False Ch. 14

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In order to make adjustments to federal income tax, you must first determine the net income before federal income tax expense

True

Most accounts needing adjustment at the end of a fiscal period have a related temporary account

True

The amount of federal income tax expense a corporation must pay is calculated using a tax rate table furnished by the IRS

True

The dividends account has a normal debit balance and is increased by a debit

True

The risk of uncollectible accounts should be recorded as an expense in the same account period that the revenue is earned.

True

Federal income tax is an expense of a corporation

True

A declared dividend is classified as an expense

False

Accounts Receivable is a contra account to its related asset account, Allowance for Uncollectible Accounts

False

Accumulated depreciation is the depreciation expense that has been recorded since the purchase of a current asset

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 dividend.

False

General ledger account balances are changed when adjustments are entered on the work sheet

False

Many businesses use a percentage of total sales to estimate uncollectible accounts expense

False

Merchandise Inventory is an asset account with a normal credit balance

False

Owner's equity accounts for a corporation normally are listed under a major chart of accounts division title Operating Expenses

False

The adjustment for merchandise inventory is common for all businesses

False

The difference between an asset's account balance and its related contra account balance is called par value

False

The prepaid insurance account is adjusted to show the value of insurance that has been prepaid

False

The steps for preparing a work sheet are very different for proprietorship and corporations

False

The supplies-store account must be adjusted to show the expense of the supplies that are purchased during the year

False

When a corporation makes the quarterly payment of estimated federal income tax, the cash account is debited

False

When a declared divdend is paid, Dividends Payable is credited.

False

A board of directors distributes earnings of a corporation to its stockholders and declaring a dividend

True

A corporation's board of directors is elected by the stockholders

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 statments

True

An amount earned by a corporation and 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 accumulated each year of a plant asset's useful life.

True


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