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Study Resources (Accounting)

9) The double-declining-balance method ignores the residual value while calculating the amount of depreciation. 10) When an asset is fully depreciated, the residual value must be written off. 11) When an asset is fully depreciated, no further depreciation expense is recorded. 12) Companies are required to use Modified Accelerated Cost Recovery System (MACRS).
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35) Which of the following are extra compensation items that are not paid directly to an employee? A) Bonuses B) Benefits C) Wages D) Commissions 36) Federal income taxes are: A) deducted to arrive at an employee's gross pay. B) added to arrive at an employee's net pay. C) deducted to arrive at an employee's net pay. D) not.
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49) The following information is needed to reconcile the cash balance for Fire Steel Inc. •  A deposit of $5,800 is in transit. •  Outstanding checks total $1,500. •  The book balance is $6,800 at February 28, 2013. •  The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent. • .
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  Learning Objective 9-1 1) The receivables of an organization can be categorized into accounts receivable, notes receivable, and other receivables. 2) A company will have receivables whenever it sells goods or services on credit. 3) The two major types of receivables are interest receivable and taxes receivable. 4) A receivable can be described as.
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21) A company's accountant capitalized a payment that should be recorded as a revenue expenditure. How will this error affect the financial statements of the company? A) Net income will be overstated. B) Revenues will be understated. C) Assets will be understated. D) Liabilities will be understated. 22) Nobells Corp. has acquired land and paid.
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  Learning Objective 10-1 1) Plant assets are long-lived, tangible assets used in the operation of a business. 2) The process of allocating the cost of a plant asset over its useful life is known as cost reduction. 3) The cost principle requires a business to record the assets acquired or services received at.
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11) In order to exercise effective internal control over receivables the credit department must have access cash. 12) Businesses must maintain a single account receivable account for all customers. 13) Individual customer accounts of accounts receivable are known as subsidiary accounts. 14) Sales through credit cards and debit cards are journalized in the.
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21) Which of the following is an example of exercise of internal control over receivables? A) separate cash collection and credit allowance duties B) extend credit only to customers who are most likely to pay C) pursue collection from customers to maximize cash flow D) ensure quick recovery of accounts receivable 22) Which of the.
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57) Refer to the following bank reconciliation:             Bank                              Book               Balance, June 30, 2014$11,240.00Balance, June 30, 2014$10,200.00 Add:Add: Deposit in transit3,110.00Note collected by bank2,100.00 Interest revenue55.00 Less:Less: Outstanding checks #5061,200.00NSF check85.00 Outstanding checks #510900.00Bank service charge20.00 __________________ Adjusted balance, June 30, 2014$12,250.00Adjusted balance, June 30, 2014$12,250.00 Journalize the adjusting entry for the third reconciling item: NSF check. 58) Refer to the following bank.
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7) For a company with significant uncollectible receivables, the direct write-off method is unsuitable because: A) it overstates liabilities on the balance sheet. B) it violates the matching principle. C) direct write-offs would be immaterial. D) it is not allowed for tax reasons. 8) Under the direct write-off method, the entry to write off an.
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9) According to generally accepted accounting principles, if the fair value of goodwill decreases, an impairment loss must be recorded. 10) A trademark should not be amortized over its useful life. 11) If a company uses the contra account, Accumulated Amortization, this account will typically be shown on the balance sheet. 12) Which.
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39) In reconciling a bank statement, the bank balance is $2,100 and the checkbook balance is $2,001. Which of the following is the most probable reason for the bank balance being larger than the book balance? A) There are outstanding checks. B) The bank has deducted certain amounts for bank service charges. C).
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Learning Objective 10-7 1) An exchange transaction is said to have commercial substance if the future cash flows change as a result of the transaction. 2) Exchanges of plant assets that have commercial substance require any gain or loss on the transaction to be recognized. 3) In exchanges of plant assets with commercial.
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  Learning Objective 11-1 1) Amounts owed for products or services, due within one year, are current liabilities. 2) Amounts owed for products or services purchased on account are accounts receivable. 3) Unearned revenues relating to a one-year service contract are current liabilities until they are earned. 4) Notes payable are considered long-term debts, usually.
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Learning Objective 10-4 1) Natural resource is an asset that comes from the earth and is consumed. 2) The process by which businesses spread the allocation of a natural resource's cost over its usage is known as depreciation. 3) The units-of-production method is used to compute the depletion expense. 4) Businesses should not deplete.
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7) Which is the most liquid form of assets? A) Cash B) Accounts Receivable C) Inventory D) Supplies 8) A company has a petty cash fund amount of $300. When replenished, it has petty cash receipts of $30 for gas expense, $32 for postage expense, $16 for supplies expense and $10 for miscellaneous expenses. Assume.
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10) Which of the following are the two methods of accounting for uncollectible receivables? A) direct write-off method and liability method B) asset method and sales method C) allowance method and liability method D) allowance method and direct write-off method 11) Which of the following are two methods of estimating uncollectible receivables? A) allowance method and.
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5) FUTA, Federal unemployment compensation tax, is not withheld from an employees' gross earnings. 6) SUTA, State unemployment compensation tax, is not withheld from an employees' gross earnings. 7) SUTA, State unemployment compensation tax, is paid by the employer only and is not deducted from an employee's gross pay. 8) FUTA, Federal unemployment.
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15) Which of the following is included in the denominator of the acid-test ratio? A) Current liabilities less accounts payable B) Total liabilities C) Total current liabilities D) Total current assets 16) From the following details, calculate the acid-test ratio. (Round to two decimal places.) Cash $120,000 Short-term investments 150,000 Net current receivables 280,000 Inventory 290,000 Total current liabilities 790,000 A) 0.91 B) 0.94 C) 1.06 D) 0.70 17) What.
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9) Journal entries are required if the bank reconciliation includes a book error. 10) Journal entries that are necessitated by reconciling items on the book side of the reconciliation include either a debit to Cash or a credit to Cash. 11) If a bank reconciliation includes interest revenue, a journal entry is.
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8) Black n White Company purchased equipment for $45,000. The company recorded total depreciation of $36,000 on the equipment. On January 1, 2015, Black n White traded in the equipment for new equipment, paying $54,000 cash. The fair market value of the new equipment is $65,000. Journalize the company's exchange.
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