Accounting Midterm Study Guide

Front

Using the straight-line method of depreciation, what is the annual depreciation expense if the original cost of the asset is $820, estimated salvage/disposal value is $100, and the useful life of the asset is 5 years?

Back

$144

Front

Which account has a normal credit balance? Options: Sales Discounts, Purchases Returns and Allowances, Sales Returns and Allowances, Accounts Receivable

Back

Purchases Returns and Allowances

Front

When ABC Company makes a cash payment on account, ABC Company's Accounts Payable is debited. Which account is credited?

Back

Cash

Front

What type of business purchases and sells goods?

Back

Merchandising

Front

Where is the information found to prepare a Trial Balance?

Back

General ledger

Front

Which financial statement reports assets, liabilities, and stockholder's equity?

Back

Balance Sheet

Front

Which journal entry is used to adjust the Prepaid Insurance account? Options: Income Summary - Dr, Prepaid Insurance - Cr, Insurance Expense - Dr, Prepaid Insurance - Cr, Prepaid Insurance - Dr, Income Summary - Cr, Insurance Expense - Dr, Income Summary - Cr

Back

Insurance Expense - Dr, Prepaid Insurance - Cr

Front

Using the percentage of net sales method, what is the adjustment amount for Uncollectible Accounts (Bad Debts Expense) if net sales is $64,000 and the uncollectible rate is 2%?

Back

$1,280

Front

Which account is debited when journalizing closing entries? Options: Sales, Sales Returns and Allowances, Purchases, Cash

Back

Sales

Front

Which report is prepared after all adjusting and closing entries have been posted?

Back

Post-Closing Trial Balance