Accounting-Chapter 15 Review

Accrued revenue refers to revenue earned in one fiscal period but not received until a later fiscal period.

• True

• False

The formula for calculated annual straight-line depreciation equals (original cost - useful life) / salvage value.

• True

• False

How often are estimated federal income tax installments paid?

• Quarterly

• Monthly

• Daily

• Annually

Only accounts with a balance are listed on the unadjusted trial balance.

• True

• False

Which type of depreciation is considered in estimating the useful life of an asset?

• Functional Depreciation

• Physical Depreciation

• Accumulated Depreciation

• Functional & Physical Depreciation

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

• True

• False

Which account is used to adjust Merchandise Inventory at the end of a fiscal period?

• Merchandise Inventory Expense

• Income Summary

• Sales

• Purchases

The annual straight line depreciation of equipment costing $7,000 with a salvage value of $1,000 and a useful life of 5 years would be $1,200.

• True

• False

The value of the insurance coverage used is debited to what account?

• Prepaid Insurance

• Income Summary

• Prepaid Insurance Expense

• Insurance Expense

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

• True

• False