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12. As time passes, fixed assets other than land lose their capacity to provide

ID: 2553208 • Letter: 1

Question

12. As time passes, fixed assets other than land lose their capacity to provide useful servi systematically allocated to expense through a process called es. To account for this decrease in usefulness, the cost of fixed assets is a. equipment allocation b. depreciation c. accumulation d. matching 13. At the end of the fiscal year, the usual adjusting entry for accrued employees was omitted. Which of the following statements is true? salaries owed to a. Salary Expense for the year was understated. b. The total of the liabilities at the end of the year was overstated. c. Net income for the year was understated. d. Owner's equity at the end of the year was understated 14. When there are a large number of individual accounts with a common characteristie, it is common to place them in a separate ledger called a(n) a, accounts receivable ledger b. accounts payable ledger c. creditors ledger d. subsidiary ledger 15. Calculate income from operations for Jonas Company based on the following data: $764,00 52,5 538,000 ales a. $485,500 b. $711,500 ?. $173,500 d. $226,000 The primary difference between a periodic and perpetual inventory system is that a a. periodic system determines the inventory on hand only at the end of the accounting 16. period b. periodic system keeps a record showing the inventory on hand at all times c. periodic system provides an easy means to determine inventory shrinkage d. periodic system records the cost of the sale on the date the sale is made The Corbit Corp. sold merchandise for $10,000 cash. The cost of the merchandise sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be 17.

Explanation / Answer

Ans 12) Depreciation

Note: A reduction in the value of an asset over time, due in particular to wear and tear.

Ans   13) Salary Expense for the year was understated.

Ans 14) Subsidiary ledger

Note: Is a group of similar accounts whose combined balances equal the balance in a specific     general ledger account.

Ans 15) $173,500

Note: sales – cost of goods sold = gross profit, gross profit – operating expenses = net operating income

Ans 16) Periodic system determines the inventory on hand only at the end of the accounting period

Ans 17)       -    DR Cash          10,000
                              CR    Sales         10000

- DR Cost of Merchandise Sold      7,590

CR Merchandise Inventory      7,590