CH. 8, 9, 10, 11 quizzes Flashcards
Able sells a piece of equipment to Smythe for $1,800 on August 1st. The equipment cost $1,000. The equipment is picked up by Smythe on August 10. How many performance obligations are included in this transaction?
1.
Performance obligations are distinct.
The amount of consideration that an entity expects to be entitled to as a reult of providing goods or services is the _________.
Transaction price
Which one of the following is not an indicator of the transfer of control to the buyer?
Seller has the legal title to the asset
Two methods used to account for revenue recognition for long term contracts are the percentage of completion method and the ___________.
Completed-contract method
What is the balance sheet classification of a bank account whose fund balance is restricted for retirement bonds that mature in six years?
Non-current asset
What is a bank overdraft?
Negative cash balance that occurs when a company writes a check in an amount that exceeds the account balance.
Which of the following is a reduction of a catalog price whenever a company sells to a reseller in the same industry?
Trade discount
The net realizable value (NRV) of accounts receivable is calculated as:
Gross receivables minus the allowance for uncollectible accounts.
The flow of a manufacturers product costs through the inventory account is:
Raw Materials inventory
Work-in-Process inventory
Finished Goods inventory
Jamison sells goods to Matthews Company. When Jamison ships goods to Matthews with F.O.B shipping point terms:
The title passes from Jamison to Matthews when the goods leave Jamison Company.
When comparing FIFO and LIFO inventory methods _________.
FIFO matches the oldest inventory costs against revenue.
LIFO matches the newest inventory costs against revenue.
When following the U.S. GAAP, the lower-of-cost-or-market rule for inventory requires a firm to report _______.
The inventory at cost if the market value of inventory is lower than its cost basis.
A cost that is recorded as an asset _______.
Capital expenditure
What type of account is Accumulated Depreciation?
Contra-asset
When a firm sells or abandons an asset, how is the gain or loss to be recognized on the income statement?
The difference between cash proceeds received and the carrying value of the asset.
