Principles of Accounting (Exam 3) Questions With Complete
Solutions
Accelerated Depreciation Method Correct Answers A
depreciation method that provides for a higher depreciation
amount in the first year of the asset's use, followed by a
gradually declining amount of depreciation.
Accounts Receivable Correct Answers A claim against the
customer created by selling merchandise or services on credit.
Accumulated Depreciation Correct Answers The contra asset
account credited when recording the depreciation of a fixed
asset.
Allowance for Doubtful Accounts Correct Answers The contra
asset account for accounts receivable.
Allowance Method Correct Answers The method of accounting
for uncollectible accounts that provides an expense for
uncollectible receivables in advance of their write-off.
Amortization Correct Answers The periodic transfer of the cost
of an intangible asset to expense.
Bad Debt Expense Correct Answers The operating expense
incurred because of the failure to collect receivables.
Book Value Correct Answers The cost of a fixed asset minus
accumulated depreciation on the asset.
, Capital Expenditures Correct Answers The costs of acquiring
fixed assets, adding to a fixed asset, improving a fixed asset, or
extending a fixed asset's useful life.
Contingent Liabilities Correct Answers Liabilities that may
arise from past transactions if certain events occur in the future.
Copyright Correct Answers An exclusive right to publish and
sell a -literary, artistic, or musical composition.
Current Liabilities Correct Answers Liabilities that will be due
within a short time (usually one year or less) and that are to be
paid out of current assets.
Depletion Correct Answers The process of transferring the cost
of natural resources to an expense account.
Depreciable Cost Correct Answers The amount of an asset's
cost that will be depreciated. The cost minus the expected
salvage value.
Depreciation Correct Answers The systematic periodic transfer
of the cost of a fixed asset to an expense account during its
expected useful life.
Direct write-off Method Correct Answers The method of
accounting for uncollectible accounts that recognizes the
expense only when accounts are judged to be worthless.
Discounted Note Correct Answers Short term obligation sold at
a discount on its par value in lieu of paying interest
Solutions
Accelerated Depreciation Method Correct Answers A
depreciation method that provides for a higher depreciation
amount in the first year of the asset's use, followed by a
gradually declining amount of depreciation.
Accounts Receivable Correct Answers A claim against the
customer created by selling merchandise or services on credit.
Accumulated Depreciation Correct Answers The contra asset
account credited when recording the depreciation of a fixed
asset.
Allowance for Doubtful Accounts Correct Answers The contra
asset account for accounts receivable.
Allowance Method Correct Answers The method of accounting
for uncollectible accounts that provides an expense for
uncollectible receivables in advance of their write-off.
Amortization Correct Answers The periodic transfer of the cost
of an intangible asset to expense.
Bad Debt Expense Correct Answers The operating expense
incurred because of the failure to collect receivables.
Book Value Correct Answers The cost of a fixed asset minus
accumulated depreciation on the asset.
, Capital Expenditures Correct Answers The costs of acquiring
fixed assets, adding to a fixed asset, improving a fixed asset, or
extending a fixed asset's useful life.
Contingent Liabilities Correct Answers Liabilities that may
arise from past transactions if certain events occur in the future.
Copyright Correct Answers An exclusive right to publish and
sell a -literary, artistic, or musical composition.
Current Liabilities Correct Answers Liabilities that will be due
within a short time (usually one year or less) and that are to be
paid out of current assets.
Depletion Correct Answers The process of transferring the cost
of natural resources to an expense account.
Depreciable Cost Correct Answers The amount of an asset's
cost that will be depreciated. The cost minus the expected
salvage value.
Depreciation Correct Answers The systematic periodic transfer
of the cost of a fixed asset to an expense account during its
expected useful life.
Direct write-off Method Correct Answers The method of
accounting for uncollectible accounts that recognizes the
expense only when accounts are judged to be worthless.
Discounted Note Correct Answers Short term obligation sold at
a discount on its par value in lieu of paying interest
