ACC 201 EXAM 3

During a period of increasing purchase prices, which inventory costing method will yield the lowest cost of goods sold

FIFI

Which account would most likely appear on the income statement of a merchandise company, but not on the income statement of a service company

Cost of goods sold (COGS)

The affect of recording depreciation for the year is a(n)....

Decrease in assets and a decrease in net income

There are some liabilities, such as income taxes payable and the estimated warranty liability. Failure to record these amounts in the same period as the related revenues is a violation of the...

Expense recognition principle

Generally accepted accounting principle require that research and development costs to develop a new product be...

Expensed in the period incurred

On Oct 1st, a company borrowed $60,000 from the 8th nation bank on a 1-year, 7% note. If the company's fiscal year ends on Dec. 31st, a year-end adjusting entry is required to increase.

Interest payable by $1,050 (60,000 x 0.07 = 4,2000 (4,200 x 3/12 = 1,050)

On Jan. 1 a company sold a machine for $5,000 that it had used for several years. The machine cost $11,000, and had accumulated depreciation of $4,500 at the time of sale. What gain or loss will be reported on the Income Statement for the sale of the machine for the year ended Dec. 31st.

Loss of $1,500