ACCT 229 2026 TEST PAPER QUESTIONS AND ANSWERS
RATED A+
✔✔Direct write off method - ✔✔- Violates matching because you wait until you can
identify the bad debt customer to record it as an expense
✔✔Depreciable asset - ✔✔Plant and equipment
✔✔Cost of land - ✔✔- ADD: Cost to buy, sales commissions, back taxes, title fees, title
insurance, legal fees, any land preparation cost, shipping, installation
- LESS: salvage value
- Cost incurred to bring the asset into its productive capacity
✔✔Land improvements - ✔✔- Fence, driveway, parking lot
✔✔Building - ✔✔- Closing cost, broker fee, commission, remodeling cost, interest (if
being constructed)
✔✔Equipment - ✔✔- ADD: Invoice price, freight in, installation cost, trail run, sales tax
- LESS: Discount
✔✔Straight line depreciation/ Formula for yearly depreciation expense - ✔✔Cost -
salvage
----------------
# of years in useful life
✔✔Max about to be depreciated - ✔✔Cost - salvage
✔✔Units of production - ✔✔Cost - salvage
----------------- Cost per unit
# of units in useful life
-
Cost per unit x # of units produced in current year = dep exp
✔✔Book value - ✔✔Cost
(AD)
✔✔Journal entry for a gain - ✔✔Cash
AD
----Asset at cost
----Gain
✔✔Journal entry for loss - ✔✔Cash
AD
, ----Asset at cost
Loss
✔✔Amortization of intangibles - ✔✔- Straight line depreciation
- Lessor of legal life and useful life
- Expense all R&D cost do not add to asset
✔✔Record interest baring note at issuance - ✔✔Cash
---- Note pay
✔✔Record interest baring note at maturity - ✔✔Note pay
Int exp
----Cash
✔✔Record non interest baring note at issuance - ✔✔Cash
Disct
----Note pay
✔✔Record non interest baring note at maturity - ✔✔Note pay
Int exp
---- Cash
----Disct
✔✔Promises of a bond - ✔✔- Pay back at maturity
- Make periodic interest payments
✔✔Coupon rate - ✔✔Fixed rate of interest paid on the face value of bond ; face rate
✔✔Market rate - ✔✔Going rate of interest that borrowers/ lenders are willing to accept
on the day of the bond is sold; use the rate on date of issuance; effective rate of yield
✔✔Term bond - ✔✔All bonds mature on same date
✔✔Callable bond - ✔✔Corporation reserves the right to buy them back early at stated
price; use call price as a 5 of face value
✔✔Interest exp - ✔✔CV x Mkt %
✔✔C=M - ✔✔Sell at face value
✔✔C>M - ✔✔Sell at premium
✔✔C<M - ✔✔Sell at discount
RATED A+
✔✔Direct write off method - ✔✔- Violates matching because you wait until you can
identify the bad debt customer to record it as an expense
✔✔Depreciable asset - ✔✔Plant and equipment
✔✔Cost of land - ✔✔- ADD: Cost to buy, sales commissions, back taxes, title fees, title
insurance, legal fees, any land preparation cost, shipping, installation
- LESS: salvage value
- Cost incurred to bring the asset into its productive capacity
✔✔Land improvements - ✔✔- Fence, driveway, parking lot
✔✔Building - ✔✔- Closing cost, broker fee, commission, remodeling cost, interest (if
being constructed)
✔✔Equipment - ✔✔- ADD: Invoice price, freight in, installation cost, trail run, sales tax
- LESS: Discount
✔✔Straight line depreciation/ Formula for yearly depreciation expense - ✔✔Cost -
salvage
----------------
# of years in useful life
✔✔Max about to be depreciated - ✔✔Cost - salvage
✔✔Units of production - ✔✔Cost - salvage
----------------- Cost per unit
# of units in useful life
-
Cost per unit x # of units produced in current year = dep exp
✔✔Book value - ✔✔Cost
(AD)
✔✔Journal entry for a gain - ✔✔Cash
AD
----Asset at cost
----Gain
✔✔Journal entry for loss - ✔✔Cash
AD
, ----Asset at cost
Loss
✔✔Amortization of intangibles - ✔✔- Straight line depreciation
- Lessor of legal life and useful life
- Expense all R&D cost do not add to asset
✔✔Record interest baring note at issuance - ✔✔Cash
---- Note pay
✔✔Record interest baring note at maturity - ✔✔Note pay
Int exp
----Cash
✔✔Record non interest baring note at issuance - ✔✔Cash
Disct
----Note pay
✔✔Record non interest baring note at maturity - ✔✔Note pay
Int exp
---- Cash
----Disct
✔✔Promises of a bond - ✔✔- Pay back at maturity
- Make periodic interest payments
✔✔Coupon rate - ✔✔Fixed rate of interest paid on the face value of bond ; face rate
✔✔Market rate - ✔✔Going rate of interest that borrowers/ lenders are willing to accept
on the day of the bond is sold; use the rate on date of issuance; effective rate of yield
✔✔Term bond - ✔✔All bonds mature on same date
✔✔Callable bond - ✔✔Corporation reserves the right to buy them back early at stated
price; use call price as a 5 of face value
✔✔Interest exp - ✔✔CV x Mkt %
✔✔C=M - ✔✔Sell at face value
✔✔C>M - ✔✔Sell at premium
✔✔C<M - ✔✔Sell at discount
