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65 True/False questions

  1. Miscellaneous expense11. The dollar amount written on the face of a note.

          

  2. Depreciation schedule15. Assumptions about the purchase dates of fixed assets in order to simplify the depreciation process.

          

  3. Expensed14. Recorded the cost as an expense.

          

  4. Subsidiary record15. The esimated amount recieved for an asset at the end of its useful life. Also called salvage value and scrap value.

          

  5. Weighted average10. Assets that are expected to last longer than one year.

          

  6. Depreciation convention15. Assumptions about the purchase dates of fixed assets in order to simplify the depreciation process.

          

  7. Fixed assets10. Assets that are expected to last longer than one year.

          

  8. FIFO12. The inventory system that assumes the oldest items in inventory are the first ones sold.

          

  9. Plant assets11. Assets quickly changeable into cash: cash, short-term investments, and net accounts receivable.

          

  10. Principal10. When a company gives up collecting an account receivable, it writes off the account by removing it from company records.

          

  11. Payee9. The person who writes a check.

          

  12. Accelerated depreciation methiod15. Assumptions about the purchase dates of fixed assets in order to simplify the depreciation process.

          

  13. Trading investments9. Short-term investments fro which the purpose is to resell them for a profit.

          

  14. Fixed assets11. Assets quickly changeable into cash: cash, short-term investments, and net accounts receivable.

          

  15. Purchases discount account12. A cost of goods sold account used in the periodic inventory method to keep track fo all merchandise bought for resale during the year.

          

  16. Clear the bank15. The esimated amount recieved for an asset at the end of its useful life. Also called residual value and scrap value.

          

  17. Outstanding9. A check is _________ when it has not yet cleared the bank.

          

  18. Accrual basis accounting10. The system in which income is recognized when earned and expenses are recognized when incurred.

          

  19. Depreciated out15. The amount of the hisorical cost of an asset that gets allocated over the useful life of the asset.

          

  20. 12. Cost of goods sold9. A bank deposit made too late to show up on the bank statement.

          

  21. Face interest11. The interest rate written on the face of a note.

          

  22. Control account10. The account that shows the total of all the individual records in the subsidiary record.

          

  23. Consumption method for supplies12. The cost paid for the merchandise sold.

          

  24. Salvage value15. The esimated amount recieved for an asset at the end of its useful life. Also called salvage value and residual value.

          

  25. Non-interest-bearing-note11. A note without an interest rate written on the face, whose face amount is the future value.

          

  26. On account10. A sale for which payment is to be made later.

          

  27. Face amount11. The dollar amount written on the face of a note.

          

  28. Short-term investments9. Investments that the business plans to resell within one year. Also called investments in marketable securities.

          

  29. Prepaids13. Assets that represent expenses paid in advance that provide future benefits to the business.

          

  30. Petty cash system9. A system for maing small payments with cash.

          

  31. Marketable securities9. Securities (pieces of paper that represent ownership in investments such as stocks, bonds, etc.) that are traded on public exchanges, such as the New York Stock Exchange.

          

  32. Non-operating9. A check is _________ when it has not yet cleared the bank.

          

  33. Perpetual inventory method12. The inventory method that keeps track of merchandise costs in various purcahses and contra-purchases accounts and then computes cost of goods sold on the income statement. Inventory on the books is adjusted only at year-end.

          

  34. Current assets14. Assets that have a life longer than one year. Also capital and fixed assets.

          

  35. Interest-bearing noteA note with an interest rate written on the face, whose face amount is the present value.

          

  36. Maker9. The person who writes a check.

          

  37. Maturity value15. The esimated amount recieved for an asset at the end of its useful life. Also called salvage value and residual value.

          

  38. Specific unit10. A sale for which payment is to be made later.

          

  39. Direct write-off method12. The inventory method that keeps track of merchandise costs in various purcahses and contra-purchases accounts and then computes cost of goods sold on the income statement. Inventory on the books is adjusted only at year-end.

          

  40. Deposit not shown11. To sell a note to a bank that subtracts a discount, giving the seller the proceeds.

          

  41. Capitalized14. Assets that have a life longer than one year. Also fixed and plant assets.

          

  42. MACRS15. Modified Accelerated Cost Recovery System, for which IRS tables tell the rate by which to multiply an asset's historical cost.

          

  43. Fully depreciated15. The amount of the hisorical cost of an asset that gets allocated over the useful life of the asset.

          

  44. Capital assets10. Assets that are available to spend within a year.

          

  45. Gross margin9. A check is _________ when it has not yet cleared the bank.

          

  46. Purchase method for supplies13. The method of accounting for operating supplies that recognizes supplies as an expense when they are consumed. When supplies are purchased, the debits are stored in supplies inventory. The supplies expese account is not touched until the inventory is adjusted.

          

  47. Present value of a note11. The amount borrowed plus the interest up to the maturity date.

          

  48. Future value of a note11. The amount borrowed plus the interest up to the maturity date.

          

  49. Depreciale cost15. An asset is said to be fully depreciated when its book value equals its salvage value. Same as Fully Depreciated.

          

  50. Purchases account12. An account that is subtracted from Purchase to compute Net Purchases. Exp: Purchases Discount and Purchases Returns and Allowances

          

  51. Scrap value15. The esimated amount recieved for an asset at the end of its useful life. Also called salvage value and residual value.

          

  52. Discount a note11. To sell a note to a bank that subtracts a discount, giving the seller the proceeds.

          

  53. Quick assets11. Assets quickly changeable into cash: cash, short-term investments, and net accounts receivable.

          

  54. Contra-purchases account12. An account that is subtracted from Purchase to compute Net Purchases. Exp: Purchases Discount and Purchases Returns and Allowances

          

  55. Unrealized gain/loss9. A gain or los as a result of a business asset going up or down in value, but the asset has not been sold.

          

  56. Realized gain/loss9. A gain or los as a result of a business asset going up or down in value, but the asset has not been sold.

          

  57. Proceeds of a note11. The amount a bank gives in exchange for a note.

          

  58. Purchases returns and allowances12. A contra-purchases account used under the periodic inventory method to keep track of refunds a business gets for returning merchandise to vendors, or reductions in price (allowances) the vendors offer to resolved complaints.

          

  59. Maker9. The person to whom a check is written.

          

  60. Periodic inventory method10. The method that recognizes bad-debt expenses in the period the business writes off the accounts receivable. Not GAAP.

          

  61. Residual value15. The esimated amount recieved for an asset at the end of its useful life. Also called salvage value and scrap value.

          

  62. LIFO12. The inventory system that assumes the oldest items in inventory are the first ones sold.

          

  63. Cash basis accounting10. The system in which income and expenses are recognized when cash changes hands. This does not meet GAAP.

          

  64. Write-off11. The loan amount that remains unpaid.

          

  65. Plant assets14. Assets that have a life longer than one year. Also capital and fixed assets.