Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

ACCT207 > Exam 2 Concepts > Flashcards

Exam 2 Concepts Flashcards

(71 cards)

Start Studying
1
Q

Companies report interest revenue as…

A

other revenue and gains

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

________ controls:

  1. Safeguarding assets
  2. Enhancing reliability of accounting records
  3. Increases efficiency of operations
  4. Ensures compliance with laws and regulations
A

Internal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

This fluctuates based on how much it is used.

A

Unit-of-activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Repairs or maintainenances are _______, which means they are ________.

A

expenses; debited

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

______________ is required to maintain a system of internal control.

  1. Independent outside auditors must attest to the adequacy of internal controls.
A

Sarbane Oxley Act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The amount of bad debt expense that should be recorded in the adjusting entry is the difference between the _______ _______ and the _______ _________ in the allowance account.

A

required balance; existing balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

________ _______ = cost less accumulated depreciation.

A

Book Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How to account for the disposal of plant assets:

  1. Eliminate book value of that useful asset at date of disposal
  2. Record cash proceeds, if any
  3. Account for the difference between book value and cash proceeds as a gain or loss
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

To properly manage receivables, management must:

  1. Determine to whom to extend credit
  2. Establish a payment period
  3. Monitor collections
  4. Evaluate liquidity
  5. Accelerate cash receipts
A

^^^

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Promissory notes may be used :

(1) when individuals and companies lend or borrow money,
(2) when the amount of the transaction and the credit period exceed normal limits, and
(3) in settlement of accounts receivable.

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Costs incurred to increase:

  1. Operating efficiency
  2. Productive Capacity
  3. Useful life of a plant asset

Are a _______ to the ______ asset.

A

debit; plant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

_______ items such as the following produce time lags:

  1. Deposits in transit
  2. Outstanding checks
  3. Bank memoranda
  4. Errors
A

Reconciling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Improvements to land AFTER its initial *land aquisition *include:

  1. Walkways
  2. Parking Lots
  3. Irrigation Systems
  4. Landscaping
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

_______ _______ are amounts customers owe on account.

A

Accounts receivable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

With Decreasing Prices:

______ is more profitable and has lower cost of goods sold.

A

LIFO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Cost of Goods Available for Sale/Total Units Available for Sale =

A

Average Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

When the account is written off, accounts receivable are _______ and allowance for doubtful accounts are ________.

A

credited; debited

**Please note: The WRITE-OFF is reversed if the company pays the amount that has been written-off. **

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

________ is the process of allocating to expense the cost of a plant asset over its useful life.

A

Depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Intangible assets with _______ lives should **NOT **be amortized.

A

indefinite

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Indefinite Life of an Intangible asset, ___________.

A

NO AMORTIZATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Accelerating Depreciation (declining balance) every company will take it because…

A

there are less taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

______ value is the **estimate **of the asset’s value at the end of it’s useful life.

A

Salvage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Depreciation reflects an asset’s decreasing _______ and _________ producing ability, resulting from wear and tear or becoming obsolete.

A

usefulness; revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

______ reports lower earnings, but LESSER taxes.

A

LIFO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_ costs incurred to acquire a plant asset that are expensed immediately.
**Revenue Expenditure**
17
Additions and improvements are \_\_\_\_\_\_\_\_\_.
**capitalized**
18
Beginning inventory + Purchases - Returns and Discount Allowances = \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
**Goods Available Sold**
19
Whether companies are at the point-of-sale of merchandise on account, or performing a service on account...companies record \_\_\_\_\_\_\_ \_\_\_\_\_\_\_.
accounts receivable
21
**Aquisition costs** are those that prepare land for its intended use, which include 1. Grading & Filling 2. Draining 3. Cleaning 4. Removing 5. Closing Costs 6. Cost of Land Acquired
^^
22
Short-term receivables are considered \_\_\_\_\_\_ \_\_\_\_\_\_\_ and are located below \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ on the balance sheet.
current assets; short-term investments
23
With the declining balance method we have \_\_\_\_\_ in the beginning and \_\_\_\_\_\_\_ in the end.
more; less
24
In a **contra asset account**, bad debts expense are \_\_\_\_\_\_\_\_ and allowance for doubtful accounts are \_\_\_\_\_\_\_\_\_\_.
debited; credited
26
Cost - Salvage Value / Useful Life =
**Straight-Line Depreciation**
27
\_\_\_\_\_ \_\_\_\_\_\_ are claims evidenced by formal instruments of credit.
Notes Receivable
28
With the **Allowance Method**, losses are \_\_\_\_\_\_\_\_\_.
estimated
30
Goods held on \_\_\_\_\_\_\_\_ are not accounted in the inventory.
**consignment**
31
**Effective Cash Management:** 1. Keep inv low 2. Monitor payments of liabilities 3. Plan timing of major expenditures 4. Invest idle cash
^^^
32
Units-of Activity =
Depreciable cost / Total Units
33
**Accumulated Depreciation **is a \_\_\_\_\_\_\_\_\_\_\_\_\_ acccount.
contra-asset
34
Companies only make revisions of periodic depreciation in \_\_\_\_\_\_ and \_\_\_\_\_\_\_ periods.
present; future
35
The party making the promise to pay is called the \_\_\_\_\_\_\_\_.
maker
36
If an intangible asset has a \_\_\_\_\_\_\_ life, its cost should be allocated (amortized) over its useful life.
**limited**
37
_______ is when you get rid of the old shit first because you have the risk of it going bad or going out of fashion.
**FIFO**
38
With \_\_\_\_\_\_ we use the new coal first because it is **_NOT_** like the old coal is going to go bad like food does!
**LIFO**
39
The cost of \_\_\_\_\_\_ \_\_\_\_\_\_\_ includes all expenditures to acquire the asset and make it ready for its intended use.
**Plant Assets**
41
Companies report **intangible assets **at their cost *less *any amounts _amortized._
43
If a company issues cash in exchange for a note, the entry is a ______ to Notes Receivable and a \_\_\_\_\_\_\_ to Cash in the amount of the loan.
debit; credit
44
If Laird Company decides to establish a $100 fund on March 1, the entry in jounral form is: Mar 1. Petty Cash 100 Cash 100 (To Establish a petty cash fund) What would the adjusting entry be if Laird Company decided on July 1st to increase the size of the fund to $250?
Petty Cash $150 Cash $150
46
Notes can be held to \_\_\_\_\_\_\_\_.
maturity
47
\_\_\_\_\_\_\_\_\_\_\_\_\_ is when the ownership of the goods remains with the seller until the goods reach the buyer.
FOB destination
48
\_\_\_\_\_\_\_ when item increases efficiencies/productive capacity/expected life.
**Capitalize**
50
Companies report bad debt and service charge expenses in the \_\_\_\_\_\_\_ \_\_\_\_\_\_\_ as operating expenses.
income statement
51
A gain or loss up until you sell a product is an increase or decrease to \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_.
Stockholder's Equity
52
The party to whom the payment is to be made is called the \_\_\_\_\_\_\_\_.
payee
53
\_\_\_\_\_\_\_\_ have 20 year renewals.
***Trademarks***
54
\_\_\_\_\_\_\_ \_\_\_\_\_\_ are costs included in a plant asset account.
**Capital Expenditure**
55
**Understating** ending inventory ***overstates ***\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
**Cost of Goods Sold**
56
How do you compute interest on notes receivables?
Face Value of Note x Annual Interest x Time (in years)
57
Cost *less *accum. depreciation = \_\_\_\_
NBV
58
Eliminate fixed assets by 1. ________ Accumulated Depreciation 2. *\_\_\_\_\_\_\_\_ *the Asset Account
*debiting; ***crediting**
60
Losses are placed on the _______ side, gains are placed on the \_\_\_\_\_\_ side.
*debit; *credit
61
A **Direct Write-Off** is theoretically \_\_\_\_\_\_\_\_\_\_.
undesirable
62
A \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ is a written promise to pay a specified amount of money in a definite time.
promissory note
63
Ordinary repairs are \_\_\_\_\_\_\_\_.
expensed
64
**Goods Available Sold** - Ending Inventory =
*Cost of Goods Sold*
65
With Rising Prices: ______ is more profitable and has lower cost of goods sold.
**FIFO**
66
***Limited*** life of an intangible asset \_\_\_\_\_\_ asset account *or *accummulated depreciation.
**credit**
67
______ is when the current replacement cost is less than the cost.
**LCM**
68
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ is when the buyer has legal title to goods after the goods have been shipped.
FOB Shipping Point
70
The following should be considered when recording *periodic ***depreciation expense **on *plant assets: * 1. Salvage Value 2. Estimated Useful Life 3. Cost
^^
71
**Declining Balance By the BV x Double Declining Bal Rate =**
Annual Expense

ACCT207 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions