1|Page
ACCT 5312 Exam 2 ||Verified Exam!!||Questions and
Answers Practice Questions with Solutions Newest |
Already Graded A+||Newest Exam!!!
The balance sheet presentation of accounts receivable net
of the allowance for bad debts has the effect of stating
accounts receivable at:
original cost.
net realizable value.
market value.
lower of cost or market. - Answer-net realizable value.
If an organization purchases $3,000 of supplies on
account, with terms of 2/10, n30:
$2,880 must be paid within 10 days of the invoice date.
$2,994 must be paid within 30 days of the invoice date.
$2,940 can be paid within 10 days of the invoice date, or
$3,000 must be paid within 30 days of the invoice date.
,2|Page
$2,940 can be paid within 10 days of the invoice date, or
$3,060 must be paid within 30 days of the invoice date. -
Answer-$3,000 × 98% = $2,940
$2,940 can be paid within 10 days of the invoice date, or
$3,000 must be paid within 30 days of the invoice date.
Agrico Incorporated accepted a 10-month, 11% (annual
rate), $5,450 note from one of its customers on July 15,
2022; interest is payable with the principal at maturity. -
Answer-Interest Receiveable: Debit 274.77
Interest Revenue: Credit 274.77
Interest earned = $5,450 × 11% × 5.5 ÷ 12 = $274.77
1. A company makes the payment of a one-year insurance
premium of $3,240 on April 1, 2022.
2. Prepare the adjusting entry that will be made at the end
of every month to show the amount of insurance premium
"used" that month.
3. Calculate the amount of prepaid insurance that should
be reported on the December 31, 2022, balance sheet
with respect to this policy.
,3|Page
4. If the premium had been $6,480 for a two-year period,
how should the prepaid amount at December 31, 2022, be
reported on the balance sheet? - Answer-1. Prepaid
insurance: Debit 3,240
Cash: Credit 3,240
2. Insurance Expense: Debt 270
Prepaid Expense: Credit 270
3. Prepaid Insurance: (3240 * 3/12) = 810
4. Non-current Asset: $810
Current Asset: $3240
When a company buys land on which there is a building,
and the building is torn down so that an appropriate new
building can be constructed on the land:
any of the purchase cost allocated to the old building is
reported as a loss.
the cost assigned to the land excludes the cost of the old
building.
the total cost of the land and old building are capitalized as
land cost.
, 4|Page
any of the purchase cost allocated to the old building is
capitalized as part of the cost of the new building. -
Answer-the total cost of the land and old building are
capitalized as land cost.
Depreciation, in accounting, is a process that results in:
depreciable assets being reported in the balance sheet at
their fair value.
accumulating cash for the replacement of the asset.
an accurate measurement of the economic usefulness of
an asset.
spreading the cost of an asset over its useful life to the
entity. - Answer-spreading the cost of an asset over its
useful life to the entity.
The inventory cost flow assumption describes the flow of
product cost: - Answer-from the asset (inventory) account
and to the expense (cost of goods sold) account.
An accounts receivable results from the sale of:
property, plant, and equipment for cash.
goods and services to customers on account.
ACCT 5312 Exam 2 ||Verified Exam!!||Questions and
Answers Practice Questions with Solutions Newest |
Already Graded A+||Newest Exam!!!
The balance sheet presentation of accounts receivable net
of the allowance for bad debts has the effect of stating
accounts receivable at:
original cost.
net realizable value.
market value.
lower of cost or market. - Answer-net realizable value.
If an organization purchases $3,000 of supplies on
account, with terms of 2/10, n30:
$2,880 must be paid within 10 days of the invoice date.
$2,994 must be paid within 30 days of the invoice date.
$2,940 can be paid within 10 days of the invoice date, or
$3,000 must be paid within 30 days of the invoice date.
,2|Page
$2,940 can be paid within 10 days of the invoice date, or
$3,060 must be paid within 30 days of the invoice date. -
Answer-$3,000 × 98% = $2,940
$2,940 can be paid within 10 days of the invoice date, or
$3,000 must be paid within 30 days of the invoice date.
Agrico Incorporated accepted a 10-month, 11% (annual
rate), $5,450 note from one of its customers on July 15,
2022; interest is payable with the principal at maturity. -
Answer-Interest Receiveable: Debit 274.77
Interest Revenue: Credit 274.77
Interest earned = $5,450 × 11% × 5.5 ÷ 12 = $274.77
1. A company makes the payment of a one-year insurance
premium of $3,240 on April 1, 2022.
2. Prepare the adjusting entry that will be made at the end
of every month to show the amount of insurance premium
"used" that month.
3. Calculate the amount of prepaid insurance that should
be reported on the December 31, 2022, balance sheet
with respect to this policy.
,3|Page
4. If the premium had been $6,480 for a two-year period,
how should the prepaid amount at December 31, 2022, be
reported on the balance sheet? - Answer-1. Prepaid
insurance: Debit 3,240
Cash: Credit 3,240
2. Insurance Expense: Debt 270
Prepaid Expense: Credit 270
3. Prepaid Insurance: (3240 * 3/12) = 810
4. Non-current Asset: $810
Current Asset: $3240
When a company buys land on which there is a building,
and the building is torn down so that an appropriate new
building can be constructed on the land:
any of the purchase cost allocated to the old building is
reported as a loss.
the cost assigned to the land excludes the cost of the old
building.
the total cost of the land and old building are capitalized as
land cost.
, 4|Page
any of the purchase cost allocated to the old building is
capitalized as part of the cost of the new building. -
Answer-the total cost of the land and old building are
capitalized as land cost.
Depreciation, in accounting, is a process that results in:
depreciable assets being reported in the balance sheet at
their fair value.
accumulating cash for the replacement of the asset.
an accurate measurement of the economic usefulness of
an asset.
spreading the cost of an asset over its useful life to the
entity. - Answer-spreading the cost of an asset over its
useful life to the entity.
The inventory cost flow assumption describes the flow of
product cost: - Answer-from the asset (inventory) account
and to the expense (cost of goods sold) account.
An accounts receivable results from the sale of:
property, plant, and equipment for cash.
goods and services to customers on account.
