MGT 8803 - FINANCIAL ACCOUNTING EXAM 1 STUDY SET Questions and Answers

MGT 8803 - FINANCIAL ACCOUNTING EXAM 1 STUDY SET Questions and Answers Wages Payable - ANSWER -This account is used to record employee compensation that has not yet been received by the employee Type: Liability Statement: Balance Sheet Current Account Common Stock - ANSWER -Term used to describe the total amount paid in by stockholders for the shares they purchase. Type: Equity Statement: Balance Sheet Accumulated Depreciation - ANSWER -A contra asset account representing the total depreciation taken to date. Type: Contra-Asset Statement: Balance Sheet Income Taxes Payable - ANSWER -Type: Liability Statement: Balance Sheet Current Account Prepaid Expense - ANSWER -Cash paid for an expense in one fiscal period that is not used until a later period Type: Asset Statement: Balance Sheet Current Account Dividens payable - ANSWER -Type: Liability Statement: Balance Sheet Current Account Depreciation Expense - ANSWER -the portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life Type: Expense Statement: Income Statement Marketable Securities - ANSWER -temporary investment of "extra" cash by organizations for up to one year in U.S. Treasury bills, certificates of deposit, commercial paper, or eurodollar loans Type: Asset Statement: Balance Sheet Current Account Allowance for Bad Debts - ANSWER -A contra asset account, related to accounts receivable, that holds the estimated amount of uncollectible accounts. Type: Contra-Asset Statement: Balance Sheet Current Account Utilities/Utilities Expense - ANSWER -Type: Expense, Statement: Income Statement Rent/Rent Expense - ANSWER -Type: Expense Statement: Income Statement Notes Receivable - ANSWER -Written promise (as evidenced by a formal instrument) for amounts to be received. Type: Asset Statement: Balance Sheet Buildings - ANSWER -property, plant, and equipment Type: Asset Statement: Balance Sheet Land - ANSWER -Type: Asset Statement: Balance Sheet Bonds Payable - ANSWER -long-term liabilities that represent money lent to the firm that must be paid back Type: Liability Statement: Balance Sheet Goodwill - ANSWER -intangible asset that is associated with the purchase of one company by another Type: Asset Statement: Balance Sheet Equipment - ANSWER -Type: Asset Statement: Balance Sheet Mortgage Payable - ANSWER -a long term liability; a written promise that pledges real property as security for payment of a debt Type: Liability Statement: Balance Sheet Licensing Revenues - ANSWER -Type: Revenues Statement: Income Statement Interest Revenues - ANSWER -Type: Revenues Statement: Income Statement Income Tax Expense - ANSWER -The product of a company's income before income taxes and its corporate income tax rate. Type: Expense Statement: Income Statement Premium on Bonds Payable - ANSWER -Occurs when a bond's issue price is more than face value Type: Liability Statement: Balance Sheet Supplies Expense - ANSWER -Type: Expense Statement: Income Statement Supplies Inventory - ANSWER -Type: Asset Statement: Balance Sheet Current Account Advertising Expense - ANSWER -Type: Expense Statement: Income Statement Salaries Expense (or Salaries) - ANSWER -Type: Expense