Chapter 5 (“Adjustments and the Worksheet”)

Question 1

Which of the following statements is not correct?

• Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset.
• The book value of a long-term asset is reduced each year as depreciation is recorded.
• Buildings and trucks are examples of long-term assets.

-Salvage value is computed by subtracting the
accumulated depreciation from the cost of a long-term asset.

Answer 1

Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset.

Question 2

Contra Accounts

Answer 2

The normal balance for a contra account is the opposite of the related account.

例）equipmentとAccumulated Depreciation—Equipment

Question 3

Locating Errors

Answer 3

If total debits do not equal total credits, find the difference between total debits and total credits. If the difference is divisible by 9, there could be a transposition error. If the difference is divisible by 2, an amount could be entered in the wrong (Debit or Credit) column.