Complete and Comprehensive ACCT 2010 Q&A Bundle

Pros and Cons of Extending Credit Advantage: 1. Increases the seller's revenues Disadvantages: 1. increase wage cost 2. bad debt cost 3. delayed receipt of cash Journal entry at time of sale (record sales on account) debit accounts receivables and credit sales revenues Journal entry to record es...

Under the accrual basis of accounting events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. Under accrual- adjusting is made when? at the end of the accounting period Under accrual- adjusting is mad...

What are the two ways businesses finance the acquisition of their assets? 1. Funds supplied by creditors (debt - liability) 2. Funds provided by owners (equity) What is the term given to a mixture of debt and equity a business uses? Capital structure Two key factors managers consider when borrowi...

State the 3 types of accounting Financial Accounting - information for external decision makers Managerial Accounting - information for internal decision makers Tax Accounting - information for the tax authorities Accounting matters why? If a company's revenue beats their projected, it will raise ...

If you purchase a building for $530,000, under the historical cost principal, you should record the building for: $530,000 Which of the following is a true statement about International Financial Reporting Standards They are converging gradually with U.S. standards What does GAAP mean? Generally A...

Each of the following is one of the four basic financial statements except what? a. income statement b. statement of cash flows c. statement of stockholders' equity d. balance sheet e. bank statement e. bank statement All of the following items are classified on the income statement as a revenue e...

Company held investments in trading securities with a fair value of $70,000 at December. These investments cost $60,000 in January. What is the amount to report on the balance sheet in December? $70,000 Trading securities with a fair value of $55,000 at December. These investments cost $45,000 on J...

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land? Cost of new parking lot constructed on the land Chanit Company purchased a building and land for $540,000 in total. Individually, the land appraised for $228,000 and th...

Accounting can either be based on what 2 types of accounting? 1. Accrual Accounting 2. Cash-Basis Accounting Accrual Accounting -Records what (2)? -Required by what? Accounting that records the impact of a business event as it occurs, regardless or whether the transaction affected cash. -Making the...

If goods in transit are shipped FOB destination A. no one has legal title to the goods until they are delivered. B. the transportation company has legal title to the goods while the goods are in transit. C. the seller has legal title to the goods until they are delivered. D. the buyer has legal tit...

Accounting - Language used to communicate financial information about economic entities - The language used to tell a story - This must be done ethically and accurately because many people are interested in this information External Users - Competitors: There are limitations on the information that...

Cash basis accounting accounting method that records revenue only when cash is received and expenses only when cash is paid Accrual basis accounting accounting method that records revenues when earned and expenses when incurred Time period concept assumes that a business's activities can be slice...

Depreciation -Land is only plant asset on deprecated(unlimited useful life) -allocation of land asset's cost to expense over its life -Supports matching principle Measuring the cost of a Plant Asset Sum of all costs incurred to bring the asset to its intended use Cost of a plant asset: Equipment ...

The purpose of adjusting entries is to (1) update amounts already recorded in the accounting records and (2) include events that occurred but had not yet been recorded. When a company pays its rent in advance its recorded as an asset is reported on the balance sheet As a company uses supplies, an ...

The journal entry to record the factoring of receivables would include a debit to cash, debit to financing expense, and credit to accounts receivable When computing the quick ratio, the numerator will include all of the following except for inventory A business offers credit terms of 2/15, n/30. T...

The quality of earnings suggests that a. stockholders want the corporation to earn enough income to be able to pay its debts. b. continuing operations and one-time transactions are of equal importance. c. net income is the best measure of the results of operations. d. income from continuing operatio...

An organization's investors and creditors will primarily use information provided by: a. the organization's financial accounting system. b. the organization's managerial accounting system. c. the Internal Revenue Service. d. the Financial Accounting Standards Board a. the organization's financi...

Accounting cycle Transactions--> journal entry in general journal--> post journal in general ledger-->prepare trial balance entry--> prepare income statement and balance sheet Accounting equation (3 ways) Assets = Liabilities + Owner's Equity Assets = Liabilities + Owner's Equity + Ne...

The liability created by a business when it purchases coffee beans and coffee cups on credit from suppliers is termed a(n): a. Accounts Payable b. Accounts Receivable c. Revenue d. Expense a. Accounts Payable Which of the following is NOT one of the three forms of business organizations? a. Corpora...

What are financial statements? business documents companies use to report the results of their activities to people and groups Basic financial statements income statement, statement of retained earnings, balance sheet, statement of cash flows What does the word net refer to in accounting an amount...

Suppose you are starting a medical data analytics firm. Which form of business will limit your liability for the business to the amount you have invested? Corporation The primary objective of financial reporting is to provide information useful for making investment and credit decisions. Which typ...