ACCY 201 FLASHCARDS QUESTIONS
WITH CORRECT ANSWERS
What does it mean to capitalize an expenditure? - Answer- To capitalize an expenditure
means to record it as an asset on the balance sheet rather than an expense on the
income statement.
Describe cash equivalents - Answer- Cash equivalents are short-term, highly liquid
investments that are easily convertible to known amounts of cash.
Calculate interest due on the maturity date of a 90-day note - Answer- Interest is
calculated using the formula: Principal x Rate x Time (in years).
Define amortization - Answer- Amortization is the gradual reduction of an intangible
asset's value over time through periodic payments.
Define note receivable - Answer- A note receivable is a written promise for amounts to
be received, typically involving interest.
Determine the maturity date of a short-term note - Answer- The maturity date is the date
when the principal and interest of a note are due, typically specified in the note
agreement.
Calculate bad debts expense using aging of receivables - Answer- Bad debts expense
is calculated by estimating uncollectible accounts based on the age of receivables.
Estimate of bad debts expense using accounts receivable method - Answer- The
estimate is based on a percentage of total accounts receivable expected to be
uncollectible.
What is FICA? - Answer- FICA (Federal Insurance Contributions Act) is a U.S. federal
payroll tax that funds Social Security and Medicare.
Define gross pay - Answer- Gross pay is the total earnings of an employee before any
deductions or taxes.
Calculate SUTA and FUTA taxes for an employer - Answer- SUTA (State
Unemployment Tax Act) and FUTA (Federal Unemployment Tax Act) taxes are
calculated based on employee wages and applicable rates.
WITH CORRECT ANSWERS
What does it mean to capitalize an expenditure? - Answer- To capitalize an expenditure
means to record it as an asset on the balance sheet rather than an expense on the
income statement.
Describe cash equivalents - Answer- Cash equivalents are short-term, highly liquid
investments that are easily convertible to known amounts of cash.
Calculate interest due on the maturity date of a 90-day note - Answer- Interest is
calculated using the formula: Principal x Rate x Time (in years).
Define amortization - Answer- Amortization is the gradual reduction of an intangible
asset's value over time through periodic payments.
Define note receivable - Answer- A note receivable is a written promise for amounts to
be received, typically involving interest.
Determine the maturity date of a short-term note - Answer- The maturity date is the date
when the principal and interest of a note are due, typically specified in the note
agreement.
Calculate bad debts expense using aging of receivables - Answer- Bad debts expense
is calculated by estimating uncollectible accounts based on the age of receivables.
Estimate of bad debts expense using accounts receivable method - Answer- The
estimate is based on a percentage of total accounts receivable expected to be
uncollectible.
What is FICA? - Answer- FICA (Federal Insurance Contributions Act) is a U.S. federal
payroll tax that funds Social Security and Medicare.
Define gross pay - Answer- Gross pay is the total earnings of an employee before any
deductions or taxes.
Calculate SUTA and FUTA taxes for an employer - Answer- SUTA (State
Unemployment Tax Act) and FUTA (Federal Unemployment Tax Act) taxes are
calculated based on employee wages and applicable rates.
