Accounting Exam 3 example #42151

On February 1, Kline company received a $6000, 10% four-month note receivable. the cash to be received by Kline Company when the note becomes due is? a. 6000 b. 6200 c. 6600 d. 200

A company that receives an interest-bearing note receivable will: a. credit Notes Receivable for the maturity value of the note b. debit Notes Receivable for the face value of the note c. credit Notes Receivable for the face value of the notes d. debit Notes Receivable for the maturity value of the note

Allowance for Doubtful Accounts is: a. closed at the end of the fiscal year b. an operating expense c. a contra asset account d. added to Accounts Receivable on the balance sheet

major assets are in forms of?

3 accounting issues:

Service organization

Merchandiser

how to journalize if a company sells merchandise on account

how to journalize if a company gets merchandise returned

When a company is paid for the sold merchandise how do you journalize

seller records losses that result from extending credit as?

Accounts receivable - allowance for doubtful accounts =

allowance for doubtful accounts is what kind of account?

2 methods of accounting for uncollectible accounts

how to journalize a balance as uncollectible

allowance method for uncollectible accounts (3)

aging the accounts receivable

Companies sell receivables for what 2 major reasons?

Selling is called?

Credit card sales are recorded _____ as cash sales

With a credit card (bank) sale the company gets the money _____ from the bank

Promissory note

promissory notes may be used.. (3)

Determining the maturity date- note is expressed in terms of:

Computing interest for a note

report short-term notes receivable at their _____ value

estimation of cash realizable value and bad debts expense are done similarly to?

Allowance for doubtful accounts is used in valuing a notes receivable True or False

Notes may be held until when

in disposing of notes receivable the maker may default and payee must do what?

during disposing of notes receivable holder can speed up conversion to cash by?

Honor of notes receivable

dishonor of notes receivable

Accounts receivable turnover ratio =

If a company receives a notes receivable how would you journalize that

how to journalize the payment of a notes receivable on time

Plant assets are resources that have (4)

plant assets are critical to a company's?

cost principle

all necessary costs incurred in making the land ready for its intended use increase _____

costs for land typically include? (5)

land improvements includes ___ necessary to make the improvements ______

land improvement examples

buildings include all costs

building purchase costs:

building construction costs

Equipment include all costs-

typical equipment costs;

journal entry for purchase of new equipment

Depreciation

3 factors in computing deprection

3 depreciation methods

straight line method equation

units of activity equation

declining balance equation

IRS requires the ____ method

ordinary repairs

ordinary repairs debit-

ordinary repairs are referred to as

additions and improvements debit- referred to as-

companies dispose of assets in 3 ways

retirement of plant assets ___ cash is receive ____ (debit) ____ (credit)

sale of plant assets compare the ___ of the asset with the ___ received form the sell if exceeds-- if less than--

common intangible assets

Limited life intangibles ___ to expanese credit ____

Indefinite-life intangibles __ limit on the asset ___ amortization

patents

copyrights

trademarks

franchise

goodwill

research and development costs are expenditures that may lead to-

market value of a bond is a function of the 3 factors that determine present value:

corporation records bond transactions when it:

the rate of interest investors demand for loaning funds to a corporation is the: a. contractual interest rate b. face value rate c. market interest rate d. stated interest rate

Karson inc issues 10-year bonds with a maturity value of $200,000. if the bonds are issued at premium, this indicates that: a. the contractual interest rate exceeds the market interest rate b. the market interest rate exceeds the contractual interest rate c. the contractual interest rate and the market interest rate are the same d. no relationship exists

when journalizing for a bond at face value you-

to record the entry of payment of interest you0

to record the accrual of interest you-

to journalize for a bond on discount you-

to journalize a bond at premium you-

each payment on a mortgage note payable consists of: a. interest on the original balance of the loan b. reduction of loan principle c. interest on the original balance of the loan and reduction of loan principal d. interest on the unpaid balance of the loan and reduction of loan principal

Powell's Courier Service recorded a loss of $9,000 when it sold a van that originally cost $84,000 for $15,000. Accumulated depreciation on the van must have been? a. $60,000 b. $78,000 c. $24,000 d. $75,000

Which one of the following items is not considered a part of a cost of a truck purchased for business use? a. cost of lettering on side of truck b. sales tax c. truck license d. freight chargs

Given the following account balances at year end, compute the total intangible assets on balance sheet Cash- $1,500,000 Accts Rec.- $4,000,000 Trademarks- $1,000,000 Goodwill- $3,000,000 R&D- $2,000,000 a. $4,000,000 b. $6,000,000 c. $8,000,000 d. $10,000,000

If a plant asset is retired before it is fully depreciated an no salvage value is received, a. a gain on disposal b. a loss on disposal c. either a gain or a loss can occur d. neither a gain no loss occurs