ACC 291 Final Exam Guide
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DESCRIPTION FOR THIS STUDY GUIDE:
1. The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the
a. aging accounts receivable method
b. direct write-off method
c. percentage of receivables method
d. percentage of sales method 2. Using the percentages of receivables method for recording bad debts expense, estimated uncollectible accounts are $25,000. If the balance of the Allowance for Doubtful Accounts is $8,000 debit before adjustment, what is the amount of bad debts expense for that period?
a. $25,000
b. $8,000
c. $33,000
d. $17,000 3. Copyrights are granted by the federal government
a. for the life of the creator or 70 years, whichever is greater
b. for the life of the creator plus 70 years
c. for the life of the creator or 70 years, whichever is shorter
d. and therefore cannot be amortized 4. The cost of a patent should be amortized over
a. 20 years
b. the shorter of its legal life or its useful life
c. the longer of its legal life or its useful life
d. its useful life 5. Mattox Company is building a new plant that will take 3 years to construct. The construction will be financed in part by funds borrowed during the construction period. There are significant architect fees, excavation fees, and building permit fees. Which of the following statements is true? a. Excavation fees are capitalized but building permit fees are not.
b. Architect fees are capitalized but building permit fees are not.
c. Interest is capitalized during the construction as part of the cost of the building.
d. The capitalized cost is equal to the contract price to build the plant less any interest on borrowed funds. 6. Orr Corporation sold equipment for $12,000. The
Instantly Download! Get Better Grades in Less Time!
100% Satisfaction Guarantee
DESCRIPTION FOR THIS STUDY GUIDE:
1. The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the
a. aging accounts receivable method
b. direct write-off method
c. percentage of receivables method
d. percentage of sales method 2. Using the percentages of receivables method for recording bad debts expense, estimated uncollectible accounts are $25,000. If the balance of the Allowance for Doubtful Accounts is $8,000 debit before adjustment, what is the amount of bad debts expense for that period?
a. $25,000
b. $8,000
c. $33,000
d. $17,000 3. Copyrights are granted by the federal government
a. for the life of the creator or 70 years, whichever is greater
b. for the life of the creator plus 70 years
c. for the life of the creator or 70 years, whichever is shorter
d. and therefore cannot be amortized 4. The cost of a patent should be amortized over
a. 20 years
b. the shorter of its legal life or its useful life
c. the longer of its legal life or its useful life
d. its useful life 5. Mattox Company is building a new plant that will take 3 years to construct. The construction will be financed in part by funds borrowed during the construction period. There are significant architect fees, excavation fees, and building permit fees. Which of the following statements is true? a. Excavation fees are capitalized but building permit fees are not.
b. Architect fees are capitalized but building permit fees are not.
c. Interest is capitalized during the construction as part of the cost of the building.
d. The capitalized cost is equal to the contract price to build the plant less any interest on borrowed funds. 6. Orr Corporation sold equipment for $12,000. The