Term
| The acquisition cost of an operating asset includes |
|
Definition
d. (all of the above)
its purchase price less any discount offered plus all costs necessary to ready the asset for use
b. net purchase price plus sales taxes, freight, and installation costs
c. the cost of labor and materials for the trial runs to check its performance |
|
|
Term
|
Definition
|
|
Term
| The purpose of depreciation, depletion, and amortization is to |
|
Definition
| b. allocate the cost of operating assets to the periods in which their use produces revenues |
|
|
Term
| Tangible operating assets include |
|
Definition
| c office buildings and land |
|
|
Term
| Accumulated depreciation, as used in accounting, may be defined as |
|
Definition
| c. the portion of the cost of a plant asset that has been recognized as an expense since the asset was required |
|
|
Term
| An expenditure on a fixed asset after acquisition must be classified as either a revenue expenditure or a capital expenditure. Select the best response |
|
Definition
b. Revenue expenditures are debited to expense accounts
c is the excess of the total face amount of bonds over the amounts received from their sale |
|
|
Term
| Discount on bonds payable |
|
Definition
arises when bonds are sold with an market interest rate that is greater than the contract interest rate.
is the excess of the total face amount of bonds over the amounts received from their sale. |
|
|
Term
|
Definition
| is the excess of the ammount received from the sale of bonds over their total face amount |
|
|
Term
| When bonds are issued at a discount |
|
Definition
a. the idfference between the ammount at issuance and the face ammount of the bond is debited as interest throught the life of the bond.
the issuing company will incur interest expense on the bond at a rate greater than its contract rate. |
|
|
Term
|
Definition
| is an adjunct account to bonds payable\\increases the net liablility accouciated with bonds |
|
|
Term
| when bonds are issued at a premium |
|
Definition
| the net liability decreases as the bond approaches maturity |
|
|
Term
| the carrying amount of a liability |
|
Definition
the recorded amount of a liability plus the amount of an associated adjunct account
the recorded amount of a liability less the amount of an associated contra acount |
|
|
Term
| sold merchandise to smith for 1200 on account |
|
Definition
accounts recevable 1200
sales 1200 |
|
|
Term
| accepted a 2 month 12% note for 1200 from smith on account |
|
Definition
notes recievable 1200
accounts receivable 1200 |
|
|
Term
| recieved maturity value of the note from smith |
|
Definition
cash 1224
notes recievable 1200
Interest revenue 24 |
|
|
Term
| on dec 1 loaned able $2000 received a 4 month 12% note |
|
Definition
Notes Receivable 2000
Cash 2000 |
|
|
Term
| accrued interest on the able note at dec 31 |
|
Definition
interest receivable 20
interest revenue 20 |
|
|
Term
| received payment at the maturity date from able |
|
Definition
cash 2080
Notes Receivable 2000
Interest Receivable 20
Interest REvenue 60 |
|
|
