ac-asset and revenue

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Item No: 1 of 40 Time Remaining: 0:40:00Question:The situation in which a company uses its accounts receivable to obtain a loan is called ___________. In this process, the company usually maintains control ofthe receivables, collects from customers, and forwards the proceeds to the lending institution to liquidate the loan.

a. Assigningb. Factoringc. Salesd. Pledging

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Item No: 2 of 40 Time Remaining: 0:39:22Question:A manufacturing firm sells a parcel of land next to one of its warehouses. Whattype of activity is this?

a. Primary operating activity, which is recurring

b. Primary operating activity, which is nonrecurringc. A recurring activity, which is peripheral to primary operationsd. A nonrecurring activity, which is peripheral to primary operatio

ns


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Item No: 3 of 40 Time Remaining: 0:38:17Question:When the ______________ method is used to estimate uncollectible accounts, the balance in the Allowance for Uncollectible Accounts is adjusted to reflect the desired ending balance.


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a. AP Agingb. Uncollectible Forecastingc. Progressive Agingd. Aging of Accounts Receivable


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Item No: 4 of 40 Time Remaining: 0:36:40Question:Which of the following costs is capitalized for a self-constructed asset?

a. Interest prior to constructionb. Interest during constructionc. Interest after construction

d. All of the above


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Item No: 5 of 40 Time Remaining: 0:36:11Question:Natural resources are referred to as __________________.

a. Intangible assetsb. Plant assetsc. Wasting assetsd. None of the above


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Item No: 6 of 40 Time Remaining: 0:35:44Question:


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Which of the following is a functional factor in determining depreciation?

a. Salvage valueb. Obsolescencec. Market costd. Market value


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Item No: 7 of 40 Time Remaining: 0:35:11Question:XYZ Company sells a residential lot to Mr. A for $140,000. The cost assigned tothe lot by XYZ Company is $56,000. The contract calls for five annual payments of $28,000. Each payment is received on time at the end of each of the five years

. If XYZ Company recognizes income under the cost-recovery-first method, how much income would they recognize in Year 3?

a. $0b. $16,800c. $28,000d. $50,400


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Item No: 8 of 40 Time Remaining: 0:34:10Question:XYZ Company reports Accounts Receivable of $60,000 and an Allowance for Uncollectible Accounts of $6,000 on its December 31 Year 1 Balance Sheet. During Year 2,credit sales total $1,800,000, collections on account total $1,680,000, and write-offs total $9,600. After aging its Accounts Receivable, XYZ Company estimates

that 10 percent of its Accounts Receivable at December 31 of Year 2 will be uncollectible. What is the balance in Accounts Receivable on December 31 of Year 2?

a. $164,400b. $166,800c. $170,400d. $174,000


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Item No: 9 of 40 Time Remaining: 0:33:22Question:XYZ Company purchases a machine with a cost of $20,000, a salvage value of $2,000, and life of five years. If the company uses the sum-of-the-years digits method, what would the depreciation charge be for the first year?

a. $1,200b. $6,000c. $6,667d. $8,000


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Item No: 10 of 40 Time Remaining: 0:32:16Question:Which of the accounts below would NOT be treated as a reduction in sales revenueon the income statement?

a. Sales Discounts Takenb. Sales Allowancesc. Sales Returnsd. Bad Debts Expense


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Item No: 11 of 40 Time Remaining: 0:31:26Question:A professional soccer team pays a signing bonus to one of its new players. Whattype of activity is this?


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a. Primary operating activity, which is recurringb. Primary operating activity, which is nonrecurringc. A recurring activity, which is peripheral to primary operationsd. A nonrecurring activity, which is peripheral to primary operatio

ns


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Item No: 12 of 40 Time Remaining: 0:30:51Question:The denominator of the sum-of-the-years digits fraction is ______________.

a. n+n

b. n/2c. n+1/2d. n(n+1)/2


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Item No: 13 of 40 Time Remaining: 0:29:55Question:Which of the following accounts is debited if depreciation is a production cost?

a. Finished Goodsb. Raw Materialsc. COGSd. Work in Process Inventory


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Item No: 14 of 40 Time Remaining: 0:29:23Question:The legal right to future benefits of an invention is referred to as a/an ______

_________.

a. expenseb. patentc. copyrightd. trademark


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Which of the following accounts is credited for depreciation?

a. Depreciation Expenseb. Accumulated Depreciationc. Fixed Assetsd. Depletion


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Item No: 16 of 40 Time Remaining: 0:28:25Question:Which of the following costs would NOT be included in the cost of machinery?

a. Invoice priceb. Installation costs

c. Testing of machinery prior to its intended used. All of the above would be included.


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Item No: 17 of 40 Time Remaining: 0:27:54Question:Early in Year 1, XYZ Company begins construction of an office building. The contract price for the construction is $23,400,000. The project, which is completedin Year 3, incurs costs as follows:

Year 1: $5,200,000Year 2: $6,500,000Year 3: $3,900,000

If XYZ Company recognizes income under the completed contract method, how much income would they recognize on the office building contract in Year 3?

a. $1,950,000b. $3,900,000c. $5,850,000d. $7,800,000


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Item No: 18 of 40 Time Remaining: 0:27:36Question:How are property, plant, and equipment and related accumulated depreciation gene

rally disclosed in the Balance Sheet?

a. By the original cost less the accumulated depreciationb. By the accumulated depreciation and the book valuec. By the book value and by providing the detail of cost and accumu

lated depreciation in the notesd. All of the above methods are used.


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Item No: 19 of 40 Time Remaining: 0:27:06Question:When the ______________ method is used to estimate uncollectible accounts, the p


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rovision for uncollectible accounts is added to the existing balance in the Allowance for Uncollectible Accounts.

a. Progressive Forecastb. Bad Debt Analysisc. Percentage of Salesd. Aging


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Item No: 20 of 40 Time Remaining: 0:26:36Question:A Florida hotel chain's properties located on the Emerald Coast are destroyed when the area is devastated by an earthquake. What type of activity is this?

a. Primary operating activity, which is recurringb. Primary operating activity, which is nonrecurringc. A recurring activity, which is peripheral to primary operationsd. A nonrecurring activity, which is peripheral to primary operatio

ns


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Item No: 21 of 40 Time Remaining: 0:26:04Question:Which of the following statements about selecting the best depreciation method for tax purposes is incorrect?

a. The goal should be to maximize the present value of the tax savi

ngs from the depreciation deductions.b. The asset should be written off as soon as possible.c. Earlier depreciation deductions are more valuable than later one

s.d. A decelerated depreciation method should be employed.


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Item No: 22 of 40 Time Remaining: 0:25:27Question:Small adjustments to and replacement of plant assets that have little or no effect on useful life are called _______________.

a. payrollb. repairsc. depreciationd. marketing


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Item No: 23 of 40 Time Remaining: 0:24:48Question:Which of the following costs is normally expensed when incurred, even though ithas future benefits?

a. Payrollb. COGS

c. Office suppliesd. Advertising


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Item No: 24 of 40 Time Remaining: 0:24:15Question:Which of the following events reduces total assets?

a. A customer returns merchandise for credit.b. Uncollectible accounts are written off under the allowance metho

d.c. An accounts receivable is collected.


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d. None of the above


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Item No: 25 of 40 Time Remaining: 0:23:43Question:An asset impairment occurs when the then-current book value of an asset exceeds

____________.

a. the sum of expected undiscounted cash flows of the assetb. the market value of the assetc. the discounted future cash flows of the assetd. None of the above


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XYZ Company buys a building on April 1, 2008 for $100,000. The building has a physical life of 50 years, but XYZ Company anticipates using the building for 50 years. At the end of 50 years, the building will have no disposal value, but at the end of 30 years it will have a disposal value of $5,000. If the company usesthe straight line method, how much depreciation would be recorded on December 31, 2008?

a. $3,167b. $2,000c. $1,500d. $2,375


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Item No: 27 of 40 Time Remaining: 0:22:06Question:XYZ Company had sales of $585,000 during Year 1, $260,000 of which were on account. The account balances in Accounts Receivable and in Allowance for Uncollectible Accounts on December 31 of Year 1 were $78,000 and $10,400 respectively. Pastexperience indicates that 5 percent of all credit sales will not be collected.How much should XYZ Company debit to the Bad Debt Expense Account?

a. $39,000b. $13,000c. $6,500d. 26,000


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Item No: 28 of 40 Time Remaining: 0:21:46Question:Late in Year 1, XYZ Company signs a contract to construct a bridge for the Florida Dept. of Transportation. The contract price is $42,000,000. The costs duringthe 3-year construction period are as follows:Year 2: $10,000,000Year 3: $15,000,000Year 4: $5,000,000

If XYZ Company recognizes income under the percentage-of-completion method, howmuch income would they recognize on the bridge contract in Year 2?

a. $4,000,000b. $10,000,000c. $12,000,000d. $14,000,000


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Item No: 29 of 40 Time Remaining: 0:21:30Question:XYZ Company had sales of $585,000 during Year 1, $260,000 of which were on account. The account balances in Accounts Receivable and in Allowance for Uncollectible Accounts on December 31 of Year 1 were $78,000 and $10,400 respectively. Past


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experience indicates that 5 percent of all credit sales will not be collected.An aging of accounts indicated that $19,500 of the receivable balance would notbe collected. How much should XYZ Company debit to the Bad Debt Expense Account?

a. $29,900b. $13,000c. $19,500d. $9,100


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Item No: 30 of 40 Time Remaining: 0:21:16Question:Which of the following is the same as an outright sale?

a. Assignment of receivablesb. Factoring of receivablesc. Pledging of receivablesd. Collection of receivables


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Item No: 31 of 40 Time Remaining: 0:20:53Question:Which of the following is a type of intangible asset that appears on the balancesheet only when one company is acquired by another?

a. Goodwillb. Capital Assets

c. Patentsd. Trademarks


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Item No: 32 of 40 Time Remaining: 0:20:24Question:XYZ Company acquires a machine for $20,000 in 2000 and depreciates it on the straight line basis, no salvage value, for two years based on an estimated ten-yearlife. In 2002 it was determined that the remaining life was only four years instead of eight. According to generally accepted accounting principles, what amount of depreciation should be recorded for 2002?

a. $5,000b. $4,000c. $3,333d. $2,000


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Item No: 33 of 40 Time Remaining: 0:20:07Question:What is the proper accounting for all research and development costs when incurred?

a. Capitalizeb. Liability

c. Expensed. Asset


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Item No: 34 of 40 Time Remaining: 0:19:42Question:Which of the following groups assets into one of seven classes for tax depreciation?

a. MACRSb. Double declining methodc. Straight line depreciation


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d. Accelerated depreciation


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Item No: 35 of 40 Time Remaining: 0:19:12Question:Which of the following is a characteristic of grouping assets into one of sevenlife classes?

a. Sum-of-the-years digits methodb. Modified accelerated cost recovery systemc. Declining balance methodd. None of the above


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On January 1, 2007, XYZ Company has machinery on the books that originally cost$200,000. In 2007, the following expenditures were made:

Minor Repairs: $5,000IMproveMents: $10,000Additions: $37,000

Given the above data, how much would be recorded in the Machinery Account on December 31,2007?

a. $252,000b. $247,000

c. $235,000d. $225,000


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Item No: 37 of 40 Time Remaining: 0:18:30Question:The sum-of-the-years digits method is an example of a/an ________________.

a. accelerated methodb. double declining methodc. MACRSd. straight line method


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Item No: 39 of 40 Time Remaining: 0:17:17Question:XYZ Company generates five new products in 2008. The interest capitalized for these items is referred to as __________________.

a. self-constructed assetsb. purchased fixed assetsc. fully depreciated assetsd. expensed purchases


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Which of the following basic patterns would be appropriate for allocation of intangibles?

a. Expense immediatelyb. Straight line depreciationc. Accelerated depreciationd. No depreciation


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This is the last question of your test.

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1. Accounting 60%2. Capitalization 75%3. Classification 17%4. Depreciation 29%5. Depreciation Methods 40%

6. Doubtful Accounts 0%7. Operating Cycle 67%8. Revenue Calculation 33%

ac-asset and revenue

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