Accounting I Chapter 15 Review

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

• Merchandise Inventory
• True
• term of the note
• 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.

• accumulated depreciation
• False
• True

• Matching Expenses with revenue

Estimated federal income tax must be paid in monthly installments.

• False
• True
• fair market value
• Matching Expenses with revenue

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

• False

• True
• Matching Expenses with revenue
• Merchandise Inventory

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

• False
• Merchandise Inventory
• True
• accumulated depreciation

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

• Matching Expenses with revenue
• False
• expense and a liability account
• True

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

• False

• Merchandise Inventory
• True
• expense and a liability account

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.

• False
• True

• accumulated depreciation
• Fiscal Year

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

• Fiscal Year
• False

• term of the note
• True

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

• False

• True
• Merchandise Inventory
• term of the note