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Questions and Answers
Which of the following should be included in the Machinery account?
Which of the following should be included in the Machinery account?
A PPE is acquired by a business on January 1, 20X6, for $30,000. The asset's estimated residual value is $8,000 and its estimated life is 5 years. Management chooses to use straight-line depreciation. On January 1, 20X8, management revises the total useful life to 6 years and the residual value to be zero. Compute the balance in Accumulated Depreciation on December 31, 20X8.
A PPE is acquired by a business on January 1, 20X6, for $30,000. The asset's estimated residual value is $8,000 and its estimated life is 5 years. Management chooses to use straight-line depreciation. On January 1, 20X8, management revises the total useful life to 6 years and the residual value to be zero. Compute the balance in Accumulated Depreciation on December 31, 20X8.
14100
A negative translation adjustment is:
A negative translation adjustment is:
A bond with a stated interest rate of 6% and a market rate of 8% was issued at a price reflecting the market interest rate. As the bond matures:
A bond with a stated interest rate of 6% and a market rate of 8% was issued at a price reflecting the market interest rate. As the bond matures:
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The journal entry to record the receipt of a cash dividend arising from an available-for-sale investment held by a company includes:
The journal entry to record the receipt of a cash dividend arising from an available-for-sale investment held by a company includes:
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Associated Services Company paid twelve months' insurance in advance totaling $9,000. At the end of the first month, the adjusting entry would include a:
Associated Services Company paid twelve months' insurance in advance totaling $9,000. At the end of the first month, the adjusting entry would include a:
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High Times Corporation owns 300 shares of Low Tide Company's ordinary shares. Low Tide has 1,000,000 ordinary shares outstanding. High Times Corporation will show the investment on their books as:
High Times Corporation owns 300 shares of Low Tide Company's ordinary shares. Low Tide has 1,000,000 ordinary shares outstanding. High Times Corporation will show the investment on their books as:
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Company A has a Note Receivable of $5,000. The note will be collected in installments. $1,000 is due within a year and the remainder is due after a year. The classification of the note on the balance sheet is:
Company A has a Note Receivable of $5,000. The note will be collected in installments. $1,000 is due within a year and the remainder is due after a year. The classification of the note on the balance sheet is:
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A company purchased merchandise inventory on credit for $600 per unit, and later sold the inventory for $800 per unit. The journal entry to record the purchase of inventory included a debit to:
A company purchased merchandise inventory on credit for $600 per unit, and later sold the inventory for $800 per unit. The journal entry to record the purchase of inventory included a debit to:
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The trial balance is used to determine whether:
The trial balance is used to determine whether:
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Study Notes
Financial Accounting Final Exam Notes
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Balance Sheets: Used to present a snapshot of a company's financial position at a specific point in time. Lists assets, liabilities, and equity.
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Assets: Resources owned by a company that have future economic value. Examples: cash, accounts receivable, inventory, equipment.
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Liabilities: Debts or obligations of a company to external parties. Examples: accounts payable, salaries payable, notes payable.
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Equity: Residual interest in the assets of a company after deducting its liabilities. Represents the owners' stake in the company.
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Transactions: Events that affect a company's financial position. Examples include sales, purchases, payments, and collections.
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Journal Entries: Record transactions in a general journal, specifying debit and credit accounts affected.
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T-Accounts: Visual representation of a specific account, with debits on one side and credits on the other, to track transaction impacts on that account's balance.
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Adjusting Entries: Entries needed at the end of an accounting period to account for accruals, deferrals, and estimates. Necessary to update accounts to reflect the correct balances.
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Depreciation: Systematic allocation of the cost of a tangible asset over its useful life. A non-cash expense.
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Inventory: Goods held for sale in the ordinary course of business. Valuation methods include FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and Weighted-Average.
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Dividends: Distributions of profits to shareholders. A reduction of retained earnings.
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Notes Payable: A written promise to pay a specific amount of money at a future date; a type of liability.
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Accounts Payable: Amounts owed to suppliers for goods or services purchased on credit.
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Receivables: Amounts owed to a company by customers for goods or services delivered on credit.
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Cash: Currency, coins, and demand deposits held by a company. A highly liquid asset.
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Allowance for Doubtful Accounts: Estimate of uncollectible accounts receivable.
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Net Realizable Value (NRV): Estimated selling price less costs to complete and sell. Used to assess inventory valuation.
Specific Accounting Concepts for Students Studying
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Accounting Equation: Assets = Liabilities + Equity. A fundamental accounting principle that helps evaluate a company's financial position.
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Trial Balance: A list of all the general ledger accounts and their corresponding balances, used to ensure debits and credits in the general ledger are equal.
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Financial Statements: Include balance sheets, income statements, and cash flow statements. They provide a comprehensive overview of the company's financial performance.
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Accrual Accounting: Recognizing revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.
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Cash Accounting: Recognizing revenues and expenses when cash is received or paid.
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