Accounting: Intangible Assets and Liabilities

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What type of assets are copyrights, patents, goodwill, franchises, trademarks, and licenses?

Intangible assets (correct)

Material assets

Tangible assets

Monetary assets

What is the category of liabilities that includes debts or obligations with an expected payment due within the regular operating cycle of a single year?

Long-term liabilities

Contingent liabilities

Non-current liabilities

Current liabilities (correct)

What type of liability represents amounts owed to employees for services they have already rendered?

Salaries payable (correct)

Interest payable

Taxes payable

Accounts payable

What is the term for liabilities that are not evidenced by a written promise to pay?

Accounts payable Signup and view all the answers

What type of liability represents the amount of promissory notes that have not been repaid?

Notes payable Signup and view all the answers

What is the term for business long-term debt for which property has been given as security or collateral?

Mortgage payable Signup and view all the answers

What type of contract is typically recorded in the Bonds Payable account?

Long-term contract of indebtedness Signup and view all the answers

What does the owner's equity represent in a business?

The owner's claim over the business's assets after liabilities have been deducted Signup and view all the answers

What is recorded in the Revenues or Income account?

Inflow of cash or other assets from clients or customers Signup and view all the answers

What is another term for Owner's Equity?

Net Worth Signup and view all the answers

What type of account is used to record the investment or share of the owner in a business?

Owner's Capital account Signup and view all the answers

What is the purpose of the Drawing or Owner's Personal account?

To record the withdrawals of capitals by the owner for personal use Signup and view all the answers

What is the effect of incurring expenses on the asset and owner's equity?

Decreases the asset and decreases owner's equity Signup and view all the answers

What is the type of expense that includes the cost of electricity, water, and fuel consumed by the business?

Utilities expenses Signup and view all the answers

What is the purpose of rent expenses?

To pay for the lease and occupation of property premises Signup and view all the answers

What is the type of expense that includes the premiums or insurance policies paid by the business?

Insurance expenses Signup and view all the answers

What is the type of expense that includes the allowance given for travel?

Traveling expenses Signup and view all the answers

What is the sum added to the principal of money obligations?

Interest expenses Signup and view all the answers

What type of expenses are incurred in connection with marketing and promoting products?

Advertising expenses Signup and view all the answers

What happens to the productivity and value of plant assets over time?

It decreases Signup and view all the answers

What is the purpose of an account in accounting?

To group, summarize, or classify changes caused by transactions Signup and view all the answers

What is the effect of a debit on assets and expenses?

Increase in assets and expenses Signup and view all the answers

What occurs when the total amount of debits exceeds the total amount of credits in an account?

Debit balance Signup and view all the answers

What type of claims are represented by liabilities?

Outsider claims Signup and view all the answers

What is the primary objective of the Economic Order Quantity (EOQ) model?

To minimize total inventory costs Signup and view all the answers

Which inventory control system is considered the most efficient, given the necessary technology?

Perpetual method Signup and view all the answers

What is the primary limitation of the stock record system?

It is difficult to determine the optimum number of units to order Signup and view all the answers

What is the underlying principle of the open-to-buy budget system?

Adjusting purchases based on increases or decreases in sales from the previous month Signup and view all the answers

What is the primary advantage of the perpetual method?

It provides precise inventory levels in real-time Signup and view all the answers