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