Final Exam 101 -- MyAccountingLab Quizzes 5-8 Flashcards
Under the Allowance Method for Uncollectible receivables, the entry to record uncillectible-account expense has what effect on the financial statements?
decrease net income
decrease assets
see question #2 chapter 5 quiz
true
see question #3 chapter 5 quiz
true
see question #4 chapter 5 quiz
true
see question #5 chapter 5 quiz
true
see question #6 chapter 5 quiz
true
see question #7 chapter 5 quiz
true
On August 1, 2012, Azores, Inc. sold equipment and accepted a six-month, 11%, $30,000 note receivable. Azores’ year-end is December 31. If Azores fails to make an adjusting entry for the accrued interest,
net income will be understated
assets will be understated
see question #9 chapter 5 quiz
true
A company sells on credit terms of 2/10, n/30 and has days’ sales in accounts receivable of 30 days. Its days’ sales in receivables is
about right
see question #1 chapter 6 quiz
true
see question #2 chapter 6 quiz
true
see question #3 chapter 6 quiz
true
The word “market” as used in “the lower or cost or market” generally means
replacement cost
see question #5 chapter 6 quiz
true
see question #6 chapter 6 quiz
true
When does the cost of inventory become an expense?
when inventory is delivered to a customer
The sum of ending inventory and cost of goods sold is
goods available
In a period of rising prices
gross profit under FIFO will be higher than under LIFO
An error understated REX Corporation’s December 31, 2012, ending inventory by $26,000. What effect will this error have on net income for 2013?
overstate
see question #1 chapter 7 quiz
true
see question #2 chapter 7 quiz
true
Depreciation is a process of allocating the cost of an asset to expense over its useful life.
true
Obsolescence as well as physical wear and tear should be considered when determining the period over which an asset should be depreciated
true
A major objective of depreciation accounting is to allocate the cost of an using an asset against the revenues it helps to generate
true
Janes’ Beauty uses the double-declining method for depreciation on its computers. Which item is not needed to compute depreciation for the first year?
estimated residual value
see question #5 chapter 7 quiz
true
see question #6 chapter 7 quiz
true
Which of the following costs are reported on a company’s income statement and balance sheet
see question #7 chapter 7 quiz
Income Statement Balance Sheet
Cost of Goods Sold Accumulated Depreciation
Which of the following items should be accounted for as a capital expenditure?
taxes paid in conjunction with the purchase of office equipment
Kline Company failed to record deprecation of equipment. How does this omission affect Kline’s financial statements?
net income is overstated
assets are overstated
A capital expenditure
adds to an asset
What is needed to compute the present value of an investment?
the interest rate
the amount of the receipt
the length of time between the investment and future receipt
(NOT - the rate of inflation - NOT)
Majestic holds an investment in Cromwell bonds that pay interest each October 31. Majestic BALANCE SHEET at December 31 should report
interest receivable
The starting point in accounting for all investments is
cost
see question #4 chapter 8 quiz
true
see question #5 chapter 8 quiz
true
see question #6 chapter 8 quiz
true
see question #7 chapter 8 quiz
true
consolidation accounting
combines the accounts of the parent company and those of the subsidiary companies
see question #9 chapter 8 quiz
true
Mac’s investment in less than 2% of Mobil’s stock, which Mac expects to hold for three years and then sell, is what type of investment?
Available-for-sale
