Acc 1010 Week 1 Financial Accounting Question Paper

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ACCT 1010 PRINCIPLES OF ACCOUNTING I (FLEX)

Name ____________________

Date _____________________
Multiple Choice and True/False Statements (3 points each)
Please answer the following questions.
1. If a company uses the allowance method to account for uncollectible accounts, the entry to write off an uncollectible account only involves balance sheet accounts.. a. True b. False

2. Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.
a. True
b. False

3. Employee payroll deductions include each of the following except
a. federal unemployment taxes.
b. federal income taxes.
c. FICA taxes.
d. insurance, pension plans, and union dues.

4. Shawnee
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$30,000 should be debited to the Land account.
b. $15,000 should be debited to Land Improvements.
c. $45,000 should be debited to the Land account.
d. $45,000 should be debited to Land Improvements.

5. Costs incurred to improve or extend the useful life of a plant asset are referred to as
a. capital expenditures.
b. expense expenditures.
c. ordinary repairs.
d. revenue expenditures

6. Which one of the following payroll taxes does not result in a payroll tax expense for the employer?
a. FICA tax
b. Federal income tax
c. Federal unemployment tax
d. State unemployment tax

7. Companies state receivables on the balance sheet at the net amount the company expects to receive in cash which is referred to as
a. trade amount
b. net realizable value
c. actual amount
d. percentage of
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(b) Prepare the year-end adjusting journal entry to record bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $650 debit. Dr. Cr.

(c) Assume that the company has a policy of providing for bad debts at the rate of 1% of sales, with Sales for 2008 being $55,000. Prepare the adjusting entry for bad debts under the percentage of sales basis. Dr. Cr.

II. Computing Depreciation Expense (25 points)
Eastman Company purchased three delivery trucks over the past years to use in operations. Due to frequent turnover in the accounting department, a different method of depreciation was used for each delivery truck purchased. Information pertaining to each delivery truck is summarized

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