Accy 201 Test 3 Burney Questions
Fully Solved.
Accounts Receivable - Answer amounts due from customers for credit sales
Bad debts - Answer accounts of these customers are uncollectible accounts
Direct write-off method - Answer records the loss from an uncollectible account receivable
when it is determined to be uncollectible
Matching (expense recognition) principle - Answer requires expenses to be reported in the
same accounting period as the sales they helped produce
Materiality constraint - Answer an amount can be ignored if its effect on the financial
statements is unimportant to users' business decisions
Aging of Accounts Receivable - Answer uses both past and current receivables information to
estimate the allowance amount
Promissory note - Answer written promise to pay a specified amount of money, usually with
interest, either on demand or at definite future date
Maker of the note - Answer the one who signed the note and promised to pay it at maturity
Principal of a note - Answer specified amount of money
Payee of the note - Answer the person to whom the note is payable
Maturity date of a note - Answer day the note must be repaid
Plant Assets - Answer tangible assets used in a company's operations that have a useful life
of more than one accounting period
Land, Machinery and Equipment, Buildings, and Land Improvements - Answer What are
examples of Plant Assets?
, Lump Sum Purchase - Answer plants assets sometimes purchased as a group in a single
transaction for a lump-sum price
Depreciation - Answer process of allocating the cost of a plant asset to expense in the
accounting periods benefiting from its use
Salvage Value - Answer an estimate of the asset's value at the end of its benefit period
Useful Life - Answer length of time it is productively used in a company's operations
Inadequacy - Answer refers to the insufficient capacity of a company's plant assets to meet
its growing productive demands
Obsolescence - Answer refers to the condition of a plant asset that is no longer useful in
producing goods or services with a competitive advantage because of new inventions and
improvements
Straight-line depreciation - Answer charges the same amount of expense to each period of
the asset's useful life
Book Value - Answer computed as the asset's total cost less its accumulated depreciation
Units-of-production depreciation - Answer charges a varying amount to expense for each
period of an asset's useful life depending on its usage
accelerated depreciation method - Answer yields larger depreciation expenses in the early
years of an asset's life and less depreciation in later years
Declining-balance method - Answer uses depreciation rate that is a multiple of the straight-
line rate and applies it to the asset's beginning-of-period book value
Revenue expenditures - Answer additional costs of plants adders that do not materially
increase the asset's life or productive capabilities
Capital expenditures - Answer additional costs of plants assets that provide benefits
extending beyond the current period
Ordinary repairs - Answer expenditures to keep an asset in normal, good operating condition
Fully Solved.
Accounts Receivable - Answer amounts due from customers for credit sales
Bad debts - Answer accounts of these customers are uncollectible accounts
Direct write-off method - Answer records the loss from an uncollectible account receivable
when it is determined to be uncollectible
Matching (expense recognition) principle - Answer requires expenses to be reported in the
same accounting period as the sales they helped produce
Materiality constraint - Answer an amount can be ignored if its effect on the financial
statements is unimportant to users' business decisions
Aging of Accounts Receivable - Answer uses both past and current receivables information to
estimate the allowance amount
Promissory note - Answer written promise to pay a specified amount of money, usually with
interest, either on demand or at definite future date
Maker of the note - Answer the one who signed the note and promised to pay it at maturity
Principal of a note - Answer specified amount of money
Payee of the note - Answer the person to whom the note is payable
Maturity date of a note - Answer day the note must be repaid
Plant Assets - Answer tangible assets used in a company's operations that have a useful life
of more than one accounting period
Land, Machinery and Equipment, Buildings, and Land Improvements - Answer What are
examples of Plant Assets?
, Lump Sum Purchase - Answer plants assets sometimes purchased as a group in a single
transaction for a lump-sum price
Depreciation - Answer process of allocating the cost of a plant asset to expense in the
accounting periods benefiting from its use
Salvage Value - Answer an estimate of the asset's value at the end of its benefit period
Useful Life - Answer length of time it is productively used in a company's operations
Inadequacy - Answer refers to the insufficient capacity of a company's plant assets to meet
its growing productive demands
Obsolescence - Answer refers to the condition of a plant asset that is no longer useful in
producing goods or services with a competitive advantage because of new inventions and
improvements
Straight-line depreciation - Answer charges the same amount of expense to each period of
the asset's useful life
Book Value - Answer computed as the asset's total cost less its accumulated depreciation
Units-of-production depreciation - Answer charges a varying amount to expense for each
period of an asset's useful life depending on its usage
accelerated depreciation method - Answer yields larger depreciation expenses in the early
years of an asset's life and less depreciation in later years
Declining-balance method - Answer uses depreciation rate that is a multiple of the straight-
line rate and applies it to the asset's beginning-of-period book value
Revenue expenditures - Answer additional costs of plants adders that do not materially
increase the asset's life or productive capabilities
Capital expenditures - Answer additional costs of plants assets that provide benefits
extending beyond the current period
Ordinary repairs - Answer expenditures to keep an asset in normal, good operating condition
