Accounting Test Three

Plant assets are defined as;

Salvage value is;

Honoring a note receivable indicates that the maker has:

Betterments are;

The depreciation method in which a plant asset's depreciation expense for a period is determined by applying a constant depreciation rate to the asset's beginning-of-period book value is called:

Gideon Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Which of the following is an example of an extraordinary repair?

A company receives 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use 360 days a year.)

Another name for a capital expenditure is:

One characteristic of plant assets is that they are:

A receivable is an amount due from another party;

A credit sale of $5,275 to a customer would result in which of the following?

The depreciation method that charges the same amount of expense to each period of the asset's useful life is called:

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

A company purchased a delivery van for $28,000 with a salvage value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

The maturity date of a note receivable:

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Which of the following is not true regarding a credit card expense?

A benefit of using an accelerated depreciation method is that:

As long as a company accurately records total credit sales information, it is not necessary to have separate accounts for specific customers.

Extraordinary repairs;

Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

The depreciation method that produces larger depreciation expense during the early years of an asset's life and smaller expense in the later years is a(an):

The relevant factors in computing depreciation do not include:

A promissory note

Which of the following is not classified as plant assets?

Ordinary repairs meet all of the following criteria except:

To capitalize an expenditure is to:

Revenue expenditures

A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the amount of depreciation expense that should be recorded for the second year?

Which of the following is not true about the Allowance for Doubtful Accounts?

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

The straight-line depreciation method and the double-declining-balance depreciation method:

Land improvements are:

The term, obsolescence, as it relates to the useful life of an asset, refers to:

The depreciation method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called:

Sellers allow customers to use credit cards for all of the following reasons except:

If a credit card sale is made, the seller debits Cash and credits Sales for the same amount.

The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:

Separate accounts receivable information for each customer is important because it reveals all of the following except:

The maturity date of a note refers to the date the note must be repaid.

Deprecation

The cost of land would not include:

The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.)

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities

The quality of receivables refers to:

A single liability cannot be divided between current and noncurrent liabilities.

Credit sales are recorded by crediting Accounts Receivable.