Accounting final Questions and Graded Answers.
Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset
will be depreciated using the straight-line method over its four-year useful life. Assuming the
asset's salvage value is $2,000, Peavey Enterprises should recognize
depreciation expense
in
Year 2 in the amount of: - 5,000
Land improvements are: - Assets that increase the usefulness of land, but that have a
limited useful life and are subject
to depreciation.
On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of
$9,000. What is the adjusting entry for the accrued interest at December 31 on the note?
(Use
360 days a year.) - Debit Interest Expense, $120; credit Interest Payable, $120.
The cost of land would
not
include: - Cost of parking lot lighting.
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: -
Debit Allowance for doubtful accounts 2000; Credit accounts receivable 2000
, Extraordinary repairs: - Extend the useful life of an asset beyond its original estimate.
The person who signs a note receivable and promises to pay the principal and interest is the: -
Maker
A credit sale of $5,275 to a customer would result in which of the following? - A debit to
the Accounts Receivable account in the general ledger and a debit to the customer's
account in the accounts receivable subsidiary ledger.
A company has net sales of $1,200,000 and average accounts receivable of $400,000. What
is its accounts receivable turnover for the period? - 3.0
Which of the following is
not
true regarding a bank (or third party) credit card expense? - Credit card expense is not
recorded by the seller.
All of the following statements regarding uncertainty in liabilities are true
except - A company only records liabilities when it knows whom to pay, when to pay, and
how much
to pay. Without all three, a liability cannot be recorded.
Employees earn vacation pay at a rate of one day per month. The company estimated and
must expense $1,500 of accrued vacation benefits for the year. Which of the following is the
necessary year-end adjusting entry to record accrued vacation benefits? - Debit Vacation
Benefits Expense $1,500; credit Vacation Benefits Payable $1,500
Merchant Company purchased property for a building site. The costs associated with the
property were:
Peavey Enterprises purchased a depreciable asset for $22,000 on April 1, Year 1. The asset
will be depreciated using the straight-line method over its four-year useful life. Assuming the
asset's salvage value is $2,000, Peavey Enterprises should recognize
depreciation expense
in
Year 2 in the amount of: - 5,000
Land improvements are: - Assets that increase the usefulness of land, but that have a
limited useful life and are subject
to depreciation.
On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of
$9,000. What is the adjusting entry for the accrued interest at December 31 on the note?
(Use
360 days a year.) - Debit Interest Expense, $120; credit Interest Payable, $120.
The cost of land would
not
include: - Cost of parking lot lighting.
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: -
Debit Allowance for doubtful accounts 2000; Credit accounts receivable 2000
, Extraordinary repairs: - Extend the useful life of an asset beyond its original estimate.
The person who signs a note receivable and promises to pay the principal and interest is the: -
Maker
A credit sale of $5,275 to a customer would result in which of the following? - A debit to
the Accounts Receivable account in the general ledger and a debit to the customer's
account in the accounts receivable subsidiary ledger.
A company has net sales of $1,200,000 and average accounts receivable of $400,000. What
is its accounts receivable turnover for the period? - 3.0
Which of the following is
not
true regarding a bank (or third party) credit card expense? - Credit card expense is not
recorded by the seller.
All of the following statements regarding uncertainty in liabilities are true
except - A company only records liabilities when it knows whom to pay, when to pay, and
how much
to pay. Without all three, a liability cannot be recorded.
Employees earn vacation pay at a rate of one day per month. The company estimated and
must expense $1,500 of accrued vacation benefits for the year. Which of the following is the
necessary year-end adjusting entry to record accrued vacation benefits? - Debit Vacation
Benefits Expense $1,500; credit Vacation Benefits Payable $1,500
Merchant Company purchased property for a building site. The costs associated with the
property were:
