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19 terms

Financial Accounting test 2

STUDY
PLAY
True
Freight Terms of FOB Destination means the seller pays the freight costs. T/F
True
Merchandise inventory is classified as a current asset in a classified balance sheet. T/F
False
The terms 2/10, n/30 state that a 2% discount is available if the invoice is paid within the first 30 days of the purchase. T/F
False
When purchasing land, the cost for clearing, draining, filling, and grading should be charged to a Land Improvements account. T/F
True
When purchasing equipment, sales taxes and installation and testing costs should be charged to equipment. T/F
True
A segregation of duties among employees minimized the possibility of collusion. T/F
True
The safeguarding of assets is an objective of a company's system of internal control. T/F
True
Allowance for Doubtful Accounts is a contra asset account. T/F
False
An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected. T/F
True
The cost of a patent should be amortized over its legal life or useful life, whichever is shorter.
Gross Profit
Sales Revenue-Cost of Goods sold = ?
Buyer
Hicks Company purchased merchandise from Beyer Company with freight terms of FOB shipping point. the freight cost will be paid by the?
Not Sufficient Funds
Check returned by the bank marked "NSF" means
Bank Errors
Journal Entries are required after bank reconciliation for all of the following except: collection of a note recievable, bank errors, bank service charges, an NSF check.
Pay relatively small expenditures
A petty cash fund is generally established in order to?
Cash
The entry to replenish a petty cash fund includes a credit to?
Land, land improvements, buildings and equipment
4 subdivisions for plant assets are?
Asset's cost - accumulated depreciation
The book value of an asset is equal to the?
Direct write-off method and the allowance method.
Two methods of accounting for uncollectible accounts are?