Accounting (15)

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

• 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

Estimated federal income tax must be paid in monthly installments.

• True

• False

All accounts are listed on the unadjusted trial balance regardless of whether there is a balance or not.

• True

• False

Functional depreciation should be considered in estimating the useful life of computer equipment.

• True

• False

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

• 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 annual straight-line depreciation of equipment costing $7,000.00 with a salvage value of $1,000.00 and a useful life of 5 years would be $1,400.00.

• True

• False

The value of the insurance coverage used is recorded as a debit to Insurance Expense.

• True

• False

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

• True

• False