Accounting 2 - Revenues & Expenses - Accounting For Assets

Question 1

Cost accounting

Answer 1

is the process of determining how much a unit of inventory costs. (Inventory)

Question 2

Cost of Goods Sold (COGS)

Answer 2

is the expense account associated with the sale of inventory. (Inventory)

Question 3

Specific identification

Answer 3

is the method of accounting for the cost of inventory by expensing inventory sales as they occur. (Inventory)

Question 4

First-in, first-out (FIFO)

Answer 4

is the method of accounting for the cost of inventory by expensing the cost of the oldest inventory first. (Inventory)

Question 5

Last-in, first-out (LIFO)

Answer 5

is the method of accounting for the cost of inventory by expensing the cost of the newest inventory first. (Inventory)

Question 6

Conversion costs

Answer 6

include direct labor and overhead costs for producing a good or service. (Inventory)

Question 7

Production overhead

Answer 7

is an indirect cost that includes allgeneral costs of the production process, minus direct costs (direct labor and raw materials) and SG&A activities. (Inventory)

Question 8

Overhead rate

Answer 8

distributes the overhead costs to inventory based on metrics such as labor costs, labor hours, etc. (Inventory)

Question 9

Direct Costs

Answer 9

material costs, labor costs. (Inventory)

Question 10

Conversions Costs

Answer 10

labor costs, overhead costs. (Inventory)

Question 11

Indirect Costs

Answer 11

overhead costs. (Inventory)

Question 12

Fixed assets

Answer 12

are tangible noncurrent assets.

Question 13

Service life

Answer 13

is the expected amount of time (often estimated by a tax authority) a fixed asset will remain useful before succumbing to wear-and-tear or obsolescence.

Question 14

Depreciation

Answer 14

is the means by which the cost of a fixed asset is expensed over time. (Depreciation)

Question 15

Depreciation expense

Answer 15

is the amount of depreciation assigned to an asset each accounting period. (Depreciation)

Question 16

Straight-line depreciation

Answer 16

is a method of depreciating an asset in equal amounts each accounting period of the asset?s service life. (Depreciation)

Question 17

Units of production

Answer 17

is a method of assigning depreciation based on the output of an asset. (Depreciation)

Question 18

Book value

Answer 18

The difference between an asset?s cost and its accumulated depreciation is its…. (Depreciation)

Question 19

Gain (Loss) on Asset Disposal

Answer 19

The difference between the sale value of an asset and its book value is recorded in the equity account. (Depreciation)

Question 20

Wasting assets

Answer 20

are natural resources, such as wells and mines, that undergo depletion. (Depletion and Amortization)

Question 21

Depletion occurs as

Answer 21

wasting assets are used up. (Depletion and Amortization)

Question 22

Depletion base

Answer 22

is the total value of a wasting asset that will undergo depletion (Similar to an asset?s depreciable cost). (Depletion and Amortization)

Question 23

Depletion rate

Answer 23

equals the depletion base divided by the total number of units of substance that will be extracted from a resource. (Depletion and Amortization)

Question 24

Amortization

Answer 24

is the process by which intangible assets are expensed over time in accordance with the matching concept. (Depletion and Amortization)