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Study Resources (Accounting)

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) for tax purposes. 13) Which of the following categories of assets should be depreciated? A) tangible property, plant and equipment, other than land B) intangible property C) land D) natural resources 14).
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Learning Objective 9-2 1) Depreciation is the allocation of a plant asset's cost to expense over the useful life of the asset. 2) Residual value is also known as depreciable cost. 3) An asset is said to be obsolete when a newer asset can perform the job more efficiently. 4) When a corporation uses.
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11) If a corporation uses the contra account, Accumulated Amortization, this account will typically be shown on the balance sheet. 12) Which of the following is an intangible asset? A) copyright B) building C) land D) equipment 13) Businesses are allowed to record goodwill ________. A) when they enjoy an outstanding reputation and loyalty with customers B) if.
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11) Depending on the maturity date, held-to-maturity investments are categorized as current assets or long-term assets on the balance sheet. 12) Long-term investments are also known as marketable securities. 13) Long-term investments are all investments that are not short-term. 14) Held-to-maturity investments are categorized as long-term assets on the balance sheet, irrespective of.
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21) All available-for-sale (AFS) investments are reported on the balance sheet at ________. A) historical cost B) replacement cost C) current market value D) net realizable value 22) If there is an unrealized holding gain on available-for-sale investments, it is reported ________. A) as an adjustment to stockholders' equity on the balance sheet B) as a debit.
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11) Consolidation accounting is the way to combine the financial statements of two or more companies that have the same owners. 12) Which of the following is true of the comparison between equity securities and debt securities? A) Debt securities represent stock ownership in a company whereas equity securities represent a credit.
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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 corporation? 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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31) Long-term investments ________. A) include all debt securities that are trading investments or held-to-maturity investments B) are investments in debt and equity securities that are highly liquid and that the investor intends to sell in one year or less C) include debt and equity securities that the investor expects to hold longer.
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21) The following information is from the 2015 records of Armand Camera Shop: Accounts Receivable, December 31, 2015 $40,000 (debit) Allowance for Bad Debts, December 31, 2015 prior to adjustment 1,500 (debit) Net credit sales for 2015 175,000 Accounts written off as uncollectible during 2015 15,000 Cash sales during 2015 27,000 Bad debts expense is estimated by the percent-of-sales method. The management.
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36) The cost of an asset is $10,000,000 and its residual value is $100,000. Estimated useful life of the asset is four years. Prepare the schedule of depreciation using the double-declining-balance method of accounting. *(1,250,000 - $100,000) 37) On January 1, 2015, Zade Manufacturing Corporation purchased a machine for $40,000,000. The corporation.
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Learning Objective 11-2 1) Gross pay is the total amount of salary, wages, commissions, and bonuses earned by an employee during a pay period, after taxes or any other deductions. 2) The old age, survivors, and disability insurance portion of FICA taxes is imposed on all of an individual employee's earnings. 3) The.
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Learning Objective 9-6 1) The asset turnover ratio measures the amount of net sales generated for each average dollar of total assets invested. 2) The asset turnover ratio is calculated by dividing cost of goods sold by average total assets. 3) Maple Corp. had net sales of $200,550 for the year ended December.
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21) On June 30, 2015, Adilide Inc. discarded equipment costing $40,000. Accumulated Depreciation as of December 31, 2014, was $25,000. Assume annual depreciation on the equipment is $2,500. Journalize the partial year depreciation expense and disposal of the equipment. 22) On January 1, 2015, WAX-D purchased equipment for $60,000 cash, expecting.
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Learning Objective 8-3 1) The allowance method violates the matching principle. 2) A method of accounting for uncollectible receivables in which the company estimates bad debts expense instead of waiting to see which customers the company will not collect from is known as the allowance method. 3) Under both the allowance method and.
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Learning Objective 10-2 1) When a company invests in a long-term bond investment by paying cash, the total assets remain unchanged 2) When a firm receives interest revenue on a bond, the equity remains unchanged. 3) When a firm collects the face value of a bond investment at maturity, the total assets increase. 4).
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11) The two methods of estimating uncollectible receivables are ________. A) allowance method and amortization method B) aging-of-accounts-receivable method and percent-of-sales method C) gross-up method and direct write-off method D) direct write-off method and percent-of-completion method 12) An entry to write off an account receivable under the allowance method will ________. A) reduce net income B) have.
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Learning Objective 9-4 1) A 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.
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Learning Objective 9-7 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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31) Glitter Services Inc. pays $1,350,000 to acquire 35% of voting stock of Grey Investments Inc. on March 5, 2016. When this transaction is reported in the balance sheet, the ________. A) total equity will increase B) total assets will increase C) total assets will decrease D) total cash will decrease 32) Glitter Services Inc..
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Learning Objective 9-1 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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Learning Objective 8-5 1) The acid-test ratio is also known as the quick ratio. 2) The higher the quick ratio, the lower the business's ability to pay its current liabilities. 3) The amount of Accounts Receivable is generally reported at its gross amount on the balance sheet. 4) The acid-test ratio is a more.
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Learning Objective 10-3 1) When a company makes investments in equity securities with less than 20% ownership using idle cash, its total equity will increase. 2) Equity securities, in which the investor owns less than 20% ownership in the voting stock of the investee, can be either trading investments or available-for-sale investments. 3).
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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 9-3 1) Discarding of plant assets involves disposing of the asset for no cash. 2) When a business sells a plant asset for book value, a gain or loss should be recorded. 3) When a plant asset, fully depreciated and has no residual value, is discarded, the company will remove the.
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21) Which of the following is an example of debt securities? A) preferred stocks B) forex investment C) common stocks D) corporate bonds 22) U.S. government securities are ________. A) real estate investments B) equity securities C) debt securities D) forward contracts 23) Which of the following financial instruments pay dividends? A) futures contracts B) real estate securities C) debt securities D) equity securities 24).
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