ACCOUNTING 200 EXAM 2 REVIEW 2025
QUESTIONS AND ANSWERS
Which asset is most liquid (in accounting sense) - ANS Cash
The account, Sales returns and allowances, represents... - ANS returned mechandise
ABC offers 2/10 net 20. Which means... - ANS The customer can take a 2 % discount if they
pay in 10 days
When goods or services are sold from one business to another on credit or sales are recorded
at the gross amount, a sales discount.... - ANS 1) Is offered so that the customer will pay the
bill promptly
2) Is recorded as a contra-asset in sales
The direct write off method for uncollectible account... - ANS is acceptable, but inconsistant
with the matching concept
If a firm uses the periodic inventory system, an adjusting inventory is required to... - ANS 1)
adjust the ending inventory balance in the inventory account
2) close purchases to the inventory account
3) Close inventory to Cost of Goods Sold
On the balance sheet, the allowance for uncollectible accounts is subtracted from account
receivable to reflect the... - ANS net accounts receivable
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, During periods of rising prices, which inventory valuation best matches current inventory costs
with current revenues? Assume the number of ending inventory units is at least as large as the
number of beginning inventory units. - ANS LIFO
Deposits in transit are - ANS deposits recorded in the firms cash ledger but not yet recorded
by the bank
The balance in a firms checking account is decreased by - ANS 1) NSF checks
2) A transaction reported on a debit memo (by the bank)
3) Bank service charge
Finding accumulated depreciation using the double declining balance method - ANS 1) Find [
Original Cost X (life/expected life) ]
2) Subtract this number from original cost and multiply by (life/expected life).
3) Add both numbers from step 1 and 2 to find accumulated depreciation
Finding accumulated depreciation using the usage method - ANS [Cost - Estimated Residual
Value] / [ Estimated units of usage ] = ???
Finding accumulated deprectiation using the Straight line method - ANS [Cost - Estimated
Residual Value] / [ Expected life ]
Depreciation Expense is... - ANS 1) a non-cash expense
2) the result of an adjusting entry
3) represents the allocation of cost of the asset over the asset's useful life
Accumulated Depreciation is... - ANS the portion of the cost of a depreciable asset that has
been expensed since the asset was put into service
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 2
QUESTIONS AND ANSWERS
Which asset is most liquid (in accounting sense) - ANS Cash
The account, Sales returns and allowances, represents... - ANS returned mechandise
ABC offers 2/10 net 20. Which means... - ANS The customer can take a 2 % discount if they
pay in 10 days
When goods or services are sold from one business to another on credit or sales are recorded
at the gross amount, a sales discount.... - ANS 1) Is offered so that the customer will pay the
bill promptly
2) Is recorded as a contra-asset in sales
The direct write off method for uncollectible account... - ANS is acceptable, but inconsistant
with the matching concept
If a firm uses the periodic inventory system, an adjusting inventory is required to... - ANS 1)
adjust the ending inventory balance in the inventory account
2) close purchases to the inventory account
3) Close inventory to Cost of Goods Sold
On the balance sheet, the allowance for uncollectible accounts is subtracted from account
receivable to reflect the... - ANS net accounts receivable
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 1
, During periods of rising prices, which inventory valuation best matches current inventory costs
with current revenues? Assume the number of ending inventory units is at least as large as the
number of beginning inventory units. - ANS LIFO
Deposits in transit are - ANS deposits recorded in the firms cash ledger but not yet recorded
by the bank
The balance in a firms checking account is decreased by - ANS 1) NSF checks
2) A transaction reported on a debit memo (by the bank)
3) Bank service charge
Finding accumulated depreciation using the double declining balance method - ANS 1) Find [
Original Cost X (life/expected life) ]
2) Subtract this number from original cost and multiply by (life/expected life).
3) Add both numbers from step 1 and 2 to find accumulated depreciation
Finding accumulated depreciation using the usage method - ANS [Cost - Estimated Residual
Value] / [ Estimated units of usage ] = ???
Finding accumulated deprectiation using the Straight line method - ANS [Cost - Estimated
Residual Value] / [ Expected life ]
Depreciation Expense is... - ANS 1) a non-cash expense
2) the result of an adjusting entry
3) represents the allocation of cost of the asset over the asset's useful life
Accumulated Depreciation is... - ANS the portion of the cost of a depreciable asset that has
been expensed since the asset was put into service
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 2
