Homework Answers
1) Solution: False
Explanation: When the customer pays off their accounts, one debits cash and credits the receivable in the journal entry.
2) Solution: True
Explanation: The account receivable aging estimate the amount of account receivable that is uncollectible
3) Solution: True
Explanation: An asset's cost includes all reasonable and normal expenditures necessary to get it in it's place such as taxes, shipping charges and insurance in transit
5) Solution: False
Explanation: Depreciation = [(Cost - Residual value)] / Useful life = [2000-400]/4 = 400
6) Solution: False
Explanation: Privately held faces restrictions on the stock transfer
7) Solution: False
Explanation: Double-declining balance formula = [2 * Asset's cost * Depreciation rate]
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TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. TechCom should record...
The double-declining balance method is applied by (1) calculating the asset's straight-line depreciation rate, (2) doubling...
The double-declining balance method is applied by (1) calculating the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting residual value from cost, and (4) multiplying the rate times the cost. * O True False
The use of internal controls provides guaranteed protection against losses due to operating activities. * 2...
The use of internal controls provides guaranteed protection against losses due to operating activities. * 2 points O True False 2 points Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors. * True O False TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. TechCom should record the transaction as...
The use of internal controls provides guaranteed protection against losses due to operating activities. True False...
The use of internal controls provides guaranteed protection against losses due to operating activities. True False Factors that cause the bank statement balance of a chgawineaccount to be different from the business cRRHeaccount balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors. True False TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. TechCom should record the transaction as a debit to Accounts Receivable-RDA Electronics and a credit to...
1)The use of internal controls provides guaranteed protection against losses due to operating activities. True False...
1)The use of internal controls provides guaranteed protection against losses due to operating activities. True False 2)Factors that cause the bank statement balance of a çbeauioa account to be different from the business gbeauioeaccount balance include: outstanding cheques deposits in transit, deductions for bank fees, additions for interest, and errors. True False 3)TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. Tech Com should record the transaction as a debit to Accounts Receivable-RDA Electronics and a...
An asset that cost $5,000 has a current book value of $2,000. A revision of the...
An asset that cost $5,000 has a current book value of $2,000. A revision of the useful life of the asset estimates the asset has a remaining useful life of four years and will have a residual value of $400. Using the straight-line method, the revised depreciation will be $500 per year. * True O False
Non-current assets are any liabilities that are used in the operations of a business. TRUE:☐ FALSE:☐ 2....
Non-current assets are any liabilities that are used in the operations of a business. TRUE:☐ FALSE:☐ 2. The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use. TRUE:☐ FALSE:☐ 3. Depreciation is the process of allocating the cost of a tangible asset in a rational and systematic manner over the asset's estimated useful life. TRUE:☐ FALSE:☐ 4. Residual value is an estimate of an asset's value at the end of...
6. Depreciation methods Firms can use various methods to calculate depreciation, and it is important for...
6. Depreciation methods Firms can use various methods to calculate depreciation, and it is important for you to consider these different methods when evaluating firms. The impact of different depreciation methods is stronger for asset-intensive firms. Major factors that affect the depreciation of a fixed asset include the purchase cost, residual/salvage value, and estimated useful life of the asset. The purchase cost includes the asset's explicit cost plus necessary costs associated with setting up and operating the asset (such as...
Residual value is Multiple Choice The cost of an asset minus its accumulated depreciation An estimate...
Residual value is Multiple Choice The cost of an asset minus its accumulated depreciation An estimate of the asset's value at the end of its useful life All of these The same as an asset's service life O Another name for market value
During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that...
During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assuming the allowance method is 2 points used to account for bad debts? O No effect on net income or on total assets O Decrease in net income; no effect on total assets O Decrease in net income; decrease in total assets O...
When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $43,000 and its e...
When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $43,000 and its estimated residual value is $3,000. After 3 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 4 years and there was no change in the estimated residual value. The Depreciation Expense in year 4 is Multiple Choice 3) $10,000 $25.000 5972 Multiple Choice o $10,000 o $25,000 o $9725 o $6.525
The double-declining balance method is applied by (1) calculating the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting residual value from cost, and (4) multiplying the rate times the cost. * O True False
The use of internal controls provides guaranteed protection against losses due to operating activities. * 2 points O True False 2 points Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors. * True O False TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. TechCom should record the transaction as...
The use of internal controls provides guaranteed protection against losses due to operating activities. True False Factors that cause the bank statement balance of a chgawineaccount to be different from the business cRRHeaccount balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors. True False TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. TechCom should record the transaction as a debit to Accounts Receivable-RDA Electronics and a credit to...
1)The use of internal controls provides guaranteed protection against losses due to operating activities. True False 2)Factors that cause the bank statement balance of a çbeauioa account to be different from the business gbeauioeaccount balance include: outstanding cheques deposits in transit, deductions for bank fees, additions for interest, and errors. True False 3)TechCom customer RDA Electronics paid off an $8,300 balance on its account receivable. Tech Com should record the transaction as a debit to Accounts Receivable-RDA Electronics and a...
An asset that cost $5,000 has a current book value of $2,000. A revision of the useful life of the asset estimates the asset has a remaining useful life of four years and will have a residual value of $400. Using the straight-line method, the revised depreciation will be $500 per year. * True O False
6. Depreciation methods Firms can use various methods to calculate depreciation, and it is important for you to consider these different methods when evaluating firms. The impact of different depreciation methods is stronger for asset-intensive firms. Major factors that affect the depreciation of a fixed asset include the purchase cost, residual/salvage value, and estimated useful life of the asset. The purchase cost includes the asset's explicit cost plus necessary costs associated with setting up and operating the asset (such as...
Residual value is Multiple Choice The cost of an asset minus its accumulated depreciation An estimate of the asset's value at the end of its useful life All of these The same as an asset's service life O Another name for market value
During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assuming the allowance method is 2 points used to account for bad debts? O No effect on net income or on total assets O Decrease in net income; no effect on total assets O Decrease in net income; decrease in total assets O...
When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $43,000 and its estimated residual value is $3,000. After 3 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 4 years and there was no change in the estimated residual value. The Depreciation Expense in year 4 is Multiple Choice 3) $10,000 $25.000 5972 Multiple Choice o $10,000 o $25,000 o $9725 o $6.525
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