Acctg 326 Final Exam ACTUAL UPDATED QUESTIONS AND CORRECT ANSWERS
cost allocation when a company buys something and it generates revenue for multiple years
Depreciable base formula: cost - residual value
Annual Depreciation Formula: (cost-residual value)/useful life
, Book Value Formula: cost - accumulated depreciation
Accelerated depreciation instead of spead evenly (like straight-line) you expense more in early years
Double-Declining Balence Formula: Beginning Book Value (2 * 1/useful life)
Never let book value go below ______ Residual
Depreciation per unite formula Cost-Residual / Total Estimated units
Gain/ Loss Formula: Selling Price - Book Value
Impairment happens when... something bad happened to asset
-demand dropped
-technology outdated
-market change
Recoverability Test If cash flow even or greater than book value = ok
if cash flow is less than book value = impaired
Impairment Loss Formula Book Value - Fair Value
Depreciation in Journal Entries: Expense & Accumulated
Imparement on Journal Entry: Loss
GAAP vs IFRS GAAP no revaluation IFRS allows revaluation
Sum of Year Digits (Cost - Salvage) * (remaining life / SYD)
straight line method same amount every year
Partial year depreciation not full year
Gain is _______ Credit
Loss is _______ Debit
Debit/Credit Situation: Buy something on account D: Asset/Expense
C:Accounts Payable
Debit/Credit Situation: Pay a bill D:Accounts Payable
C: Cash
Debit/Credit Situation: Borrow Money D:Cash
C:Notes Payable
cost allocation when a company buys something and it generates revenue for multiple years
Depreciable base formula: cost - residual value
Annual Depreciation Formula: (cost-residual value)/useful life
, Book Value Formula: cost - accumulated depreciation
Accelerated depreciation instead of spead evenly (like straight-line) you expense more in early years
Double-Declining Balence Formula: Beginning Book Value (2 * 1/useful life)
Never let book value go below ______ Residual
Depreciation per unite formula Cost-Residual / Total Estimated units
Gain/ Loss Formula: Selling Price - Book Value
Impairment happens when... something bad happened to asset
-demand dropped
-technology outdated
-market change
Recoverability Test If cash flow even or greater than book value = ok
if cash flow is less than book value = impaired
Impairment Loss Formula Book Value - Fair Value
Depreciation in Journal Entries: Expense & Accumulated
Imparement on Journal Entry: Loss
GAAP vs IFRS GAAP no revaluation IFRS allows revaluation
Sum of Year Digits (Cost - Salvage) * (remaining life / SYD)
straight line method same amount every year
Partial year depreciation not full year
Gain is _______ Credit
Loss is _______ Debit
Debit/Credit Situation: Buy something on account D: Asset/Expense
C:Accounts Payable
Debit/Credit Situation: Pay a bill D:Accounts Payable
C: Cash
Debit/Credit Situation: Borrow Money D:Cash
C:Notes Payable
