ACCOUNTING -- CHAPTER 14 T/F

Generally accepted accounting principles require that corporations charge 1% of credit sales as an adjustment for uncollectible accounts.

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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.

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Estimated income tax must be paid in monthly installments.

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

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

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Purchases are recorded in the merchandise inventory account.

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The income summary account is one of the accounts used to adjust the merchandise inventory account at the end of the fiscal period.

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Two accounts used in adjusting office supplies are Supplies—Office and Supplies—Inventory.

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

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The amount recorded in Income Summary is extended to the Balance Sheet Debit or Credit column.

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