ACC 200 - MODULE 2 EXAM REVIEW
QUESTIONS WITH VERIFIED SOLUTIONS
Which of the following statements is correct regarding the financial reporting requirement
of different types of companies?
Public companies are required to submit financial reports to the SEC.
GAAP requires companies to use the accrual basis on accounting.
True
DEFT Enterprises reports Total Assets of $15 million and Total Equity of $8 million. What
is Total Liabilities of DEFT Enterprises?
$7 Million
The Investments account reported on the balance sheet includes any Cash the company has
in the bank.
False
Cosmo Technologies' balance sheet reports Accounts Receivable, Net of $45,000. In its
notes to the financial statements, Cosmo reports that the balance in the Allowance for
Uncollectible Accounts is $3,000. What is Accounts Receivable, Gross for Cosmo
Technologies?
$48,000
Sundance Properties purchases a 12-month insurance policy for $2,400 on July 1. Six-
months later, Sundance Properties is preparing their year-end balance sheet. How much
will Sundance Properties include in its Prepaid Insurance account on the balance sheet
related to this insurance policy?
$1,200
Venkman Corp reports the following balances (in random order) in the asset section of its
balance sheet. Calculate total current assets.
Accounts receivable, net - 14,000
Cash - 2,000
Intangible assets, net - 600
Inventory - 8,000
Investments - 7,000
Other long-term assets - 800
PPE, net - 42,000
Prepaid expenses - 500
, 31,500
At the start of the year, DEFT Records purchases a new piece of recording equipment for
$7,000. DEFT expects to use the equipment for 5 years and then to sell it for $500 . At the
end of two years, what will be the balance in Accumulated Depreciation for this particular
piece of equipment?
2600
At the start of the year on January 1, 20X3, Day's Market reports PPE, Gross of $45,000
and Accumulated Depreciation of $18,000. During the year, Day's Market purchased no
new PPE and they had an annual depreciation cost of $2,000. How much will Day's Market
report in PPE, Net in its balance sheet on December 31, 20X3?
25,000
Which of the following assets is not an intangible asset reported on the balance sheet?
laptop computer
Define accrual accounting-
recognizes revenues or expenses as soon as they're incurred, not necessarily when the cash is
received/paid.
Define incurred-
refers to the moment an expense is owed, regardless of when it's paid
A=
L+E
Accounts receivable net can be referred to as
the amount of money owed to a company after subtracting the allowance for doubtful accounts.
Allowance for Uncollectible Accounts can be defined as
the amount of doubtful accounts that a company estimates it will have
What are the sections of the balance sheet?
Assets, Liabilities, and Equity
Depreciation can be simplified to -
the gradual loss of value
A current asset is
an asset that is expected to be used up or converted into cash within a year
Is PPE a current asset?
QUESTIONS WITH VERIFIED SOLUTIONS
Which of the following statements is correct regarding the financial reporting requirement
of different types of companies?
Public companies are required to submit financial reports to the SEC.
GAAP requires companies to use the accrual basis on accounting.
True
DEFT Enterprises reports Total Assets of $15 million and Total Equity of $8 million. What
is Total Liabilities of DEFT Enterprises?
$7 Million
The Investments account reported on the balance sheet includes any Cash the company has
in the bank.
False
Cosmo Technologies' balance sheet reports Accounts Receivable, Net of $45,000. In its
notes to the financial statements, Cosmo reports that the balance in the Allowance for
Uncollectible Accounts is $3,000. What is Accounts Receivable, Gross for Cosmo
Technologies?
$48,000
Sundance Properties purchases a 12-month insurance policy for $2,400 on July 1. Six-
months later, Sundance Properties is preparing their year-end balance sheet. How much
will Sundance Properties include in its Prepaid Insurance account on the balance sheet
related to this insurance policy?
$1,200
Venkman Corp reports the following balances (in random order) in the asset section of its
balance sheet. Calculate total current assets.
Accounts receivable, net - 14,000
Cash - 2,000
Intangible assets, net - 600
Inventory - 8,000
Investments - 7,000
Other long-term assets - 800
PPE, net - 42,000
Prepaid expenses - 500
, 31,500
At the start of the year, DEFT Records purchases a new piece of recording equipment for
$7,000. DEFT expects to use the equipment for 5 years and then to sell it for $500 . At the
end of two years, what will be the balance in Accumulated Depreciation for this particular
piece of equipment?
2600
At the start of the year on January 1, 20X3, Day's Market reports PPE, Gross of $45,000
and Accumulated Depreciation of $18,000. During the year, Day's Market purchased no
new PPE and they had an annual depreciation cost of $2,000. How much will Day's Market
report in PPE, Net in its balance sheet on December 31, 20X3?
25,000
Which of the following assets is not an intangible asset reported on the balance sheet?
laptop computer
Define accrual accounting-
recognizes revenues or expenses as soon as they're incurred, not necessarily when the cash is
received/paid.
Define incurred-
refers to the moment an expense is owed, regardless of when it's paid
A=
L+E
Accounts receivable net can be referred to as
the amount of money owed to a company after subtracting the allowance for doubtful accounts.
Allowance for Uncollectible Accounts can be defined as
the amount of doubtful accounts that a company estimates it will have
What are the sections of the balance sheet?
Assets, Liabilities, and Equity
Depreciation can be simplified to -
the gradual loss of value
A current asset is
an asset that is expected to be used up or converted into cash within a year
Is PPE a current asset?
