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Exam (elaborations)
ACCT 2010 - Chapter 13 Test Questions and Correct Answers
What does positive cash flow allow a company to do? 1. Pay dividends to its owners. 2. Replace worn assets. 3. Expand its operations. 4. Take advantage of new investment opportunities. Cash flow statement focuses on? 1. Firm's ability to generate cash internally 2. Its management of current assets and current liabilities 3. Details of its investments and its external financing Definition of cash (two terms) 1. Cash 2. Cash equivalents Cash equivalents - Short term, highly liquid investments ...
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Accounting 2010 Exam 3 Study Questions and Correct Answers
basket purchase the total cost of a combined purchase of land and building, allocated in proportion to their relative market value depreciation a cost allocation process that matches costs of operational assets with periods benefited by their use depreciation expense depreciation for the current year accumulated depreciation total depreciation to date for an asset fixed asset turnover ratio net revenue / avg net fixed assets -> measures sales dollars generated by each dollar invested in f...
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Accounting 2010 Final Exam Questions and Correct Answers
When are liabilities created? When a company: -buys goods and services on credit -obtains short-term loans -Issued long-term debt what are current liabilities? short-term obligations that will be paid with current assets within the company's current operating cycle or within one year of the balance sheet, whichever is longer How do we increase liabilities? with a credit When is Accounts Payable used? when a company receives goods or services on credit When is Accounts Payable credited/incre...
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ACCT 2010 Exam 3 Questions and Complete Solutions
Costs that aren't capitalized examples insurance, small dollar amounts, interest on loans, ordinary repairs/maintenance Depreciation on income statement is called depreciation expense Depreciation on balance sheet is called accumulated depreciation Depreciation effects on the acct equation Assets: -accumulated dep. SE: -depreciation exp. Book Value formula cost - accumulated depreciation (net value on balance sheet) Straight Line depreciation (cost-residual value) x (1/useful life) Units ...
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ACCT 2010 Chapter 6 Review Questions and Correct Answers
What is the operating cycle? series of activities that a company undertakes to generate revenues and ultimately cash Service company -Sells services rather than physical goods -No inventory Merchandising company -Sells goods that have been obtained from a supplier -Purchase a finished good and re-sell it Inventory assets acquired for resale to customers Inventory consists of? all costs needed to get the inventory ready for sale Manufacturing company -Three types of inventory: raw materials,...
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ACCT 2010 Exam 3 – CLEMSON Questions and Correct Answers
On-a-Roll, Inc. amortizes its copyright of $20,000 over 20 years. Miss Hap, the bookkeeper, forgot to record the amortization in the current year. The effect of this mistake causes ______. assets to be overstated net income to be overstated Which of the following is contra-asset account? Allowance for Doubtful Accounts During the year, ABC Corp. realizes that a particular customer will never pay. What action should ABC take? Write off the uncollectible account and its corresponding allowance f...
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Accounting 2010 Practice Exam Questions with Correct Answers and Explanations
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31,000 and $500, respectively. During the year Kincaid reported $72,500 of credit sales. Kincaid wrote off $550 of receivables as uncollectible in Year 2. Cash collections of receivables amounted to $74,550. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. Kincaid's entry to recognize the write-off of the uncollectible accounts will: not...
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ACCT 2010 Exam 4 Questions and Solutions
The date when a cash dividend becomes a legal obligation is on the a. payable date b. declaration date c. date of record d. last day of the corporate year The journal entry on the date of record is a. To debit retained earnings and credit dividends payable b. non existent. no journal entry is required on the date of record. c. to credit dividends and credit cash. d. to debit dividends payable and credit cash Company is authorized to issue 70000 shares of $2 par common stock. On November 30, 20...
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ACCT 2010 - Chapter 4 Review Questions and Correct Answers
A primary benefit of performing a bank reconciliation is: accuracy of cash reported in the balance sheet. accuracy of liabilities reported in the balance sheet. accuracy of revenues reported in the income statement. accuracy of cash reported in the balance sheet. A bank reconciliation reconciles the difference between the bank's balance of cash and the company's balance of cash related to: errors and fraud. timing differences. both timing differences and errors and fraud represent differenc...
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Clemson ACCT 2010 -Chapters 10-13 Review Questions and Correct Answers
Accrued Liabilities liabilities for expenses that have been incurred but not paid at the end of the accounting period Amortization Schedule a table showing the gradual reduction in a balance over its life; in the context of loans and notes, an amortization schedule shows the payment of interest and repayment of principal balances owed. Contingent Liabilities potential liabilities that have arisen as a result of a past transaction or event; their ultimate outcome will not be known until a futur...
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ACCT 2010 Chapter 9 Test Questions and Correct Answers
Long-lived assets -Resources owned by a business that enable it to produce the goods or services that are sold to customers -Will not be used up within the next year -Divided into tangible and intangible Tangible assets -AKA fixed assets -Long-lived assets that have physical substance -Ex. Land, buildings, machinery, vehicles, office equipment, and furniture -Are depreciated Intangible assets -Long-lived assets which have special rights but not physical substance -Acquired for operational use ...
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