Chap 5

Question 1

account form balance sheet

Answer 1

a balance sheet that lists assets on the left and liabilities and owner’s equity on the right (Report Form Balance Sheet)

Question 2

adjusting entries

Answer 2

journal entries made to update accounts for items that were not recorded during the accounting period

Question 3

adjustments

Answer 3

adjusting entries

Question 4

book value

Answer 4

that portion of an asset’s original cost that has not yet been depreciated

Question 5

contra account

Answer 5

an account with a normal balance that is opposite that of a related account

Question 6

contra asset account

Answer 6

an asset account with a credit balance, which is contrary to the normal balance of an asset account

Question 7

depreciation

Answer 7

allocation of the cost of a long-term asset to operations during its expected useful life

Question 8

prepaid expenses

Answer 8

expense items acquired, recorded, and paid for in advance of their use

Question 9

report form balance sheet

Answer 9

a balance sheet that lists the asset accounts first, followed by liabilities and owner’s equity

Question 10

salvage value

Answer 10

an estimate of the amount that could be received by selling or disposing of as asset at the end of its useful life

Question 11

straight-line depreciation

Answer 11

allocation of an asset’s cost in equal amounts to each accounting period of the asset’s useful life

Question 12

worksheet

Answer 12

a form used to gather all data needed at the end of an accounting period to prepare financial statements