Accounting Chapter 15 Review

For a business using the periodic inventory method, purchases are recorded in the Merchandise Inventory account.

• true
• false

Estimated federal income tax must be paid in monthly installments.

• true
• false

The Income Summary account is one of the accounts used to adjust the Merchandise Inventory account at the end of the fiscal period.

• true
• false

The tax rate associated with an income tax bracket is called the effective tax rate.

• true
• false

Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.

• true
• false

A business can use any 12-month period for reporting its financial performance.

• true
• false

The book value of a plant asset is its original cost minus accumulated depreciation.

• true
• false

Cash and other assets expected to be exchanged for cash or consumed within a year are called liquid assets.

• true
• false

Depreciation expense is recorded on all plant assets.

• true
• false

Revenue earned in one fiscal period but not received until a later fiscal period is called accrued revenue.

• true
• false