Exam 2: Nalyzing Transaction and Their Effect on Financial Statement

Straight-line depreciation = (cost + residual value) ÷ estimated useful life.

The following costs are initially expressed as assets but are then reclassified as expenses when they are used up, EXCEPT for the following:

Relevance, faithful representation and cost constraint are examples of the fundamental qualitative characteristics.

If a vehicle was purchased for $6,500 and has a residual value of $500, the annual depreciation expense will be $1,000 if the estimated useful life is

Cost of goods sold should be matched up with the revenue generated on each year's Statement of Income because of the

Use the following information for questions 27-28. During a recent week, Emmy's Consulting received $25,000 cash from clients for services performed with a total value of $75,000. The balance is to be received within 30 days. -The effect of this transaction in the accounting records would be

On Oct. 1, 2017 Bonita, Inc. signed a 1-year $75,000 note payable from First National Bank. The loan plus 6% interest is to be repaid on Sept. 30, 2018. Bonita's year-end is December 31. In its 2017 financial statements Bonita will record interest expense of

A piece of equipment was recently purchased for $10,600 on June 30. It is estimated that it will last for 10 years and have a residual value of $400. The depreciation expense to be recognized in the year of acquisition, assuming a December year-end, would be

On July 1, 2017 Albacore Company paid $5,200 for a 1-year insurance policy. To record this transaction Albacore Company should

If dividends are declared and paid in the same accounting period, what is the net effect on the accounting equation?

Which of the following will NOT appear on the Statement of Income?

The purchase of equipment costing $19,500 for $1,500 down and the balance on account will increase both sides of the Statement of Financial Position Statement of Financial Position equation by $18,000.

The Classified Statement of Financial Position distinguishes between current and non current assets and liabilities.

A company received a $6,500 deposit from a customer for goods to be delivered the following month. Under the accrual and cash basis of accounting respectively, the deposit would be recorded as

A significant limitation of the template method is the lack of specific retained earnings and dividends declared accounts.

A new company signed a lease for office space during their first month of business. At that time they paid a total of $12,000 for first and last months' rent. At the end of the first month, the effect on the financial statements would be

Information has predictive value if it provides feedback to users on their previous assessments of the company.

All of the following are examples of enhancing qualitative characteristics EXCEPT

If the company had a loan outstanding, which of the following would be used to record accrued interest at the end of the accounting period?

Which of the following would be the most useful in determining if a company has sufficient resources to continue operations in the short-term?