CSUF ACCT 201A – Hatton
QUESTIONS WITH SOLUTIONS!!
cash basis of accounting - ANSWERpractice of recording revenues when cash is
received and recording expenses when the expense is paid.
creditors - ANSWERa person or company (bank) to whom money is owed to
bank service charge - ANSWERan administrative expense which reports fees
incurred by a company for the expenses associated with its checking account
transactions
market value - ANSWERthe amount for which something can be sold on a given
market
allowance for doubtful accounts - ANSWERa balance sheet account that reduces the
reported amount of accounts receivable
accumulated depreciation - ANSWERthe cumulative depreciation of an asset up to a
single point in its life
documentation procedures - ANSWER1. use prenumbered documents and all
documents should be accounted for and 2. promptly forward source documents for
accounting entries to the accounting department
independent internal verification - ANSWERinvolves the review of data prepared by
employees
establishment of responsibilities - ANSWERcontrol is most effective when only one
person is responsible for a given task
segregation of duties - ANSWER1. different individuals should be responsible for
related activities and 2. the responsibility for record keeping for an asset should be
separate from the physical custody of that asset
accrual basis of accounting - ANSWERaccounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged
allowance method - ANSWERa method of accounting for bad debts that involves
estimating uncollectible accounts at the end of each period
last-in, first-out (LIFO) - ANSWERan inventory costing method that assumes that the
latest units purchased are the first to be sold
QUESTIONS WITH SOLUTIONS!!
cash basis of accounting - ANSWERpractice of recording revenues when cash is
received and recording expenses when the expense is paid.
creditors - ANSWERa person or company (bank) to whom money is owed to
bank service charge - ANSWERan administrative expense which reports fees
incurred by a company for the expenses associated with its checking account
transactions
market value - ANSWERthe amount for which something can be sold on a given
market
allowance for doubtful accounts - ANSWERa balance sheet account that reduces the
reported amount of accounts receivable
accumulated depreciation - ANSWERthe cumulative depreciation of an asset up to a
single point in its life
documentation procedures - ANSWER1. use prenumbered documents and all
documents should be accounted for and 2. promptly forward source documents for
accounting entries to the accounting department
independent internal verification - ANSWERinvolves the review of data prepared by
employees
establishment of responsibilities - ANSWERcontrol is most effective when only one
person is responsible for a given task
segregation of duties - ANSWER1. different individuals should be responsible for
related activities and 2. the responsibility for record keeping for an asset should be
separate from the physical custody of that asset
accrual basis of accounting - ANSWERaccounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged
allowance method - ANSWERa method of accounting for bad debts that involves
estimating uncollectible accounts at the end of each period
last-in, first-out (LIFO) - ANSWERan inventory costing method that assumes that the
latest units purchased are the first to be sold
