Exam 3

Question 1

Bank sells $950 of merch to disney on credit, what is the journal entry to record the sale?

Answer 1

Debit a/r $950
Credit revenue $950

Question 2

Bank collects $950 cash from Disney paying off their credit, how to record banks journal entry to record the receipt?

Answer 2

Debit cash $950
Credit a/r $950

Question 3

The cost of a lump-sum purchase is

Answer 3

Allocated to each asset based on their relative fair market values which are found through percentages

Question 4

Straight-line depreciation

Answer 4

Cost-salvage value/ useful life

Question 5

Depreciation doesn’t necessarily mean

Answer 5

Measure physical deterioration

Question 6

Straight line rate

Answer 6

100% / assets useful life

Question 7

A machine cost 11,000 and has a $1000 salvage value. The machine has an estimated 5-year useful life. Compute the annual depreciation expense for the machine using sl rate.

Answer 7

100% /5 =20%

11,000 - 1000 =10000 x20% = 2000

Question 8

If you purchased something on June 30th you would

Answer 8

Multiply your depreciation per year by 6/12

Question 9

Include these costs in total cost

Answer 9

Any major repair that extends useful life
Ex) changing roof
Also include sales tax,shipping, instillation, testing

Question 10

Journal entry when you sell a machine at the end of the year?

Answer 10

Debit cash
Debit accumulated depreciation
Credit gain on sale OR Debit loss on sale
Credit that account (machinery, equipment)

Question 11

To record an ordinary repair

Answer 11

Debit repairs expense
Credit cash

Question 12

To record a betterments and extraordinary repairs in general ledger

Answer 12

Debit account (machinery)
Credit cash

Question 13

Accumulated depreciation is an example of a

Answer 13

Contra asset account

Question 14

When accumulated depreciation equals the assets cost and journal entry

Answer 14

It is fully depreciated

Debit accumulated depreciation ( machinery)
Credit machinery

Question 15

How do you record a depreciation expense?

Answer 15

Debit depreciation expense
Credit accumulated depreciation(equipment)

Question 16

Bank purchased equipment on 12/31 costing 8000 with 6,000 accumulated deprecation, depreciating at 1000 dollars a year and has no salvage value. They then discard on 7/1 (6 months after) of the next year the machine. Record disposal in general entry.

Answer 16

debit Accumulated depreciation (equipment ) 6,500
Debit loss on disposal 1500
Credit equipment 8000

Question 17

Record the selling of a machine that cost $500 and has an accumulated depreciation of $400. They sell it for $100

Answer 17

500 - 400 = 100 (machine worth)

Debit cash $100
Debit A/D $400
Credit machinery $500

Question 18

Record selling a machine that cost $500 and has depreciation accumulation of $400. Sells machine for $110.

Answer 18

500 - 400=100 (worth)

Debit cash $110
Debit A/D $400
Credit gain $10
Credit machinery $500

Question 19

Record selling a machine that cost $500 and has depreciation accumulation of $400. Sells machine for $80.

Answer 19

Debit cash $80
Debit loss $20
Debit A/D $400
Credit machinery $500

Question 20

Bank sells $950 of merch to designs on credit.what is the banks journal entry?

Answer 20

Debit a/r $950
Credit revenue $950

Question 21

Bank collects $950 cash from their credit with designs what is the banks journal entry?

Answer 21

Debit cash $950
Credit a/r $950

Question 22

How do you setup a journal entry for a credit card fee?

Answer 22

Debit cash
Debit credit card expense (fee)
Credit revenue

Question 23

Bank collects $950 from designs with a $50 credit card fee how does the bank record this payment?

Answer 23

Debit cash $950
Debit credit card expense $50
credit revenue $1000

Question 24

How do you write off bad debt expense from accounts receivable under the direct write off method?

Answer 24

Debit bad debts expense
Credit a/r

Question 25

How do you adjust a bad debts expense account once it is paid under the direct write off method?

Answer 25

Debit cash Credit a/r

Question 26

How do you record bad debt expense that is estimated under the allowance method?

Answer 26

Debt bad debt expense Credit allowance for doubtful accounts

Question 27

How do you record the full payment of an account under direct write off method?

Answer 27

debit cash Credit a/r

Question 28

How do you write off $400 of uncollectable accounts receivable under the allowance method?

Answer 28

Debit allowance of doubtful accounts $400 Credit a/r $400

Question 29

Somehow the company paid the bank back $400. Under the allowance of doubtful accounts method how do they record the recovery of bed debt?

Answer 29

Debit a/r $400 Credit ADA $400 Debit cash $400 Credit a/r $400

Question 30

Bank has 400,000 of credit sales for the year. They estimated that 0.6% of all credit sales are uncollectable. Record the journal entry under the percent of sales method.

Answer 30

Debit bad debt expense $2400 Credit ADA $2400

Question 31

Record the selling of an accounts receivable on credit with a factoring fee

Answer 31

Debit cash Debit factoring fee expense Credit a/r

Question 32

Record pledging the receivables

Answer 32

When A/R is used as collateral for securing a loan Debit cash Credit notes payable