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Questions and Answers
The allowance for uncollectible account is a counter-asset?
The allowance for uncollectible account is a counter-asset?
True (A)
The periodic depreciation charge of €50 will increase the value of depreciation expense and decrease the value of Property and Equipment, net by the same amount of €50.
The periodic depreciation charge of €50 will increase the value of depreciation expense and decrease the value of Property and Equipment, net by the same amount of €50.
True (A)
On December 31, 2018 the annual lease of €84,000 prepaid on September 1st 2018, expired for 4 of 12 months. The transaction will entail: an increase in rent expense of €28,000; an increase in retained income €28,000.
On December 31, 2018 the annual lease of €84,000 prepaid on September 1st 2018, expired for 4 of 12 months. The transaction will entail: an increase in rent expense of €28,000; an increase in retained income €28,000.
False (B)
On December 31, 2018 miscellaneous expenses for 2018 were paid in full in cash, €70,000. The transaction will entail: a decrease in cash €70,000; a decrease in retained earnings €70,000.
On December 31, 2018 miscellaneous expenses for 2018 were paid in full in cash, €70,000. The transaction will entail: a decrease in cash €70,000; a decrease in retained earnings €70,000.
The retained earnings at the year end, not distributed in the form of dividends, will be carried forward to the next accounting.
The retained earnings at the year end, not distributed in the form of dividends, will be carried forward to the next accounting.
A company purchased equipment on January 1, 2020, for €30,000. The equipment has an estimated useful life of 5 years and no residual value. What will be the depreciation expense at the end of 2020, assuming the straight-line method is used?
A company purchased equipment on January 1, 2020, for €30,000. The equipment has an estimated useful life of 5 years and no residual value. What will be the depreciation expense at the end of 2020, assuming the straight-line method is used?
On March 1, 2020, a company received €12,000 in advance for a 12-month service contract. By the end of the year, how much of this amount will be recognized as revenue?
On March 1, 2020, a company received €12,000 in advance for a 12-month service contract. By the end of the year, how much of this amount will be recognized as revenue?
On December 31, 2021, a company had Accounts Receivable of €100,000 and an Allowance for Doubtful Accounts of €5,000. What is the net realizable value of the Accounts Receivable?
On December 31, 2021, a company had Accounts Receivable of €100,000 and an Allowance for Doubtful Accounts of €5,000. What is the net realizable value of the Accounts Receivable?
On September 1, 2021, a company prepaid €24,000 for a one-year office rental. How much of this should be recognized as an expense by December 31, 2021?
On September 1, 2021, a company prepaid €24,000 for a one-year office rental. How much of this should be recognized as an expense by December 31, 2021?
A company sold merchandise on account for €5,000 with a cost of €3,000. How will this transaction impact the income statement?
A company sold merchandise on account for €5,000 with a cost of €3,000. How will this transaction impact the income statement?
A company paid off an accounts payable of €15,000. What is the impact on the financial statements?
A company paid off an accounts payable of €15,000. What is the impact on the financial statements?
On January 1, 2020, a company issued bonds with a face value of €100,000 at a discount of €5,000. What is the carrying amount of the bonds on the issue date?
On January 1, 2020, a company issued bonds with a face value of €100,000 at a discount of €5,000. What is the carrying amount of the bonds on the issue date?
A company's trial balance shows Salaries Expense of €80,000 and Salaries Payable of €15,000 at year-end. How much was paid in cash for salaries during the year?
A company's trial balance shows Salaries Expense of €80,000 and Salaries Payable of €15,000 at year-end. How much was paid in cash for salaries during the year?
The balance sheet of a company shows inventory of €50,000, and the income statement shows Cost of Goods Sold (COGS) of €120,000. If purchases during the year were €110,000, what was the opening inventory?
The balance sheet of a company shows inventory of €50,000, and the income statement shows Cost of Goods Sold (COGS) of €120,000. If purchases during the year were €110,000, what was the opening inventory?
A company purchased land for €200,000, issuing a €50,000 down payment and a note payable for the balance. What is the impact on the total assets?
A company purchased land for €200,000, issuing a €50,000 down payment and a note payable for the balance. What is the impact on the total assets?
A company's balance sheet shows Equipment of €100,000, and Accumulated Depreciation of €40,000. If the company sells the equipment for €50,000, what is the gain or loss?
A company's balance sheet shows Equipment of €100,000, and Accumulated Depreciation of €40,000. If the company sells the equipment for €50,000, what is the gain or loss?
On April 1, 2021, a company borrowed €30,000 by signing a 6-month, 6% note. How much interest expense will be recognized by September 30, 2021?
On April 1, 2021, a company borrowed €30,000 by signing a 6-month, 6% note. How much interest expense will be recognized by September 30, 2021?
A company declared dividends of €10,000 but paid only €6,000 during the year. What is the effect on the retained earnings?
A company declared dividends of €10,000 but paid only €6,000 during the year. What is the effect on the retained earnings?
A company had revenues of €300,000 and expenses of €200,000. Dividends declared during the year were €30,000. What is the effect on retained earnings?
A company had revenues of €300,000 and expenses of €200,000. Dividends declared during the year were €30,000. What is the effect on retained earnings?
A company's balance sheet shows total assets of €500,000 and liabilities of €200,000. What is the equity?
A company's balance sheet shows total assets of €500,000 and liabilities of €200,000. What is the equity?
Flashcards
Allowance for Uncollectible Accounts
Allowance for Uncollectible Accounts
A contra-asset account that reduces the value of accounts receivable to reflect the estimated amount of uncollectible receivables.
Depreciation
Depreciation
The process of allocating the cost of a tangible asset over its useful life, reflecting its gradual decline in value.
Prepaid Rent Expense
Prepaid Rent Expense
The amount of rent expense recognized when a company has prepaid rent for a period longer than the current accounting period.
Retained Earnings
Retained Earnings
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Net Realizable Value of Accounts Receivable
Net Realizable Value of Accounts Receivable
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Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS)
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Ending Inventory
Ending Inventory
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Straight-Line Depreciation
Straight-Line Depreciation
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Double-Declining Balance Depreciation
Double-Declining Balance Depreciation
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Collection Period
Collection Period
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FIFO (First-In, First-Out)
FIFO (First-In, First-Out)
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LIFO (Last-In, First-Out)
LIFO (Last-In, First-Out)
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Average Cost Method
Average Cost Method
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Gross Profit
Gross Profit
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Gain or Loss on Sale of Asset
Gain or Loss on Sale of Asset
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Aging of Accounts Receivable
Aging of Accounts Receivable
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Residual Value
Residual Value
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Carrying Amount
Carrying Amount
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Total Assets
Total Assets
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Total Liabilities
Total Liabilities
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Equity
Equity
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Indirect Method
Indirect Method
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Statement of Cash Flows
Statement of Cash Flows
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Foreign Currency Hedge
Foreign Currency Hedge
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Balance Sheet
Balance Sheet
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Income Statement
Income Statement
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Statement of Retained Earnings
Statement of Retained Earnings
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Lease Accounting
Lease Accounting
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Revenue Recognition
Revenue Recognition
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Pension Accounting
Pension Accounting
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Study Notes
Quiz I - Question 1
- The allowance for uncollectible accounts is a contra-asset account.
- It reduces the value of accounts receivable.
- It reflects the amount of receivables the company does not expect to collect.
- It estimates potential losses from customers.
- The net realizable value of accounts receivable is calculated after deducting the allowance.
Quiz I - Question 2
- A periodic depreciation charge of €50 increases depreciation expense.
- It decreases the value of Property and Equipment, net, by the same amount.
- This affects the income statement and the balance sheet.
Quiz I - Question 3
- The transaction involves prepaid rent, expiring for 4 of 12 months.
- Rent expense increases by €28,000.
- Prepaid rent decreases by €28,000, becoming €56,000.
- This impacts the rent expense and prepaid rent accounts, not retained earnings directly.
Quiz I - Question 4
- Payment of miscellaneous expenses in cash (€70,000) decreases cash.
- It also reduces retained earnings by the same amount, €70,000.
- This directly affects the balance sheet and the income statement via the reduction in retained earnings.
Quiz II - Question 1
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Quiz II - Question 2
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Quiz II - Question 3
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Quiz II - Question 4
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Quiz II - Question 5
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Quiz II - Question 6
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Quiz II - Question 7
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Quiz II - Question 8
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Quiz II - Question 9
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Quiz II - Question 10
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Description
Test your understanding of essential accounting principles with this quiz. Questions cover topics such as uncollectible accounts, depreciation expense, prepaid rent, and cash expenses. Perfect for students and professionals looking to reinforce their knowledge in accounting.
