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Act 210 Final Exam _1

Act 210 Final Exam _1 - Term Definition For efficiency of...

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Term: For efficiency of operations and better control over cash, a company should maintain only one bank account. True or False Definition: False Term: The Accumulated Depreciation account represents a cash fund available to replace plant assets. True or False Definition: False Term: Elway Company purchases land for $85,000 cash. Elway assumes $2,500 in property taxes due on the land. The title and attorney fees totaled $1,000. Elway has the land graded for $2,200. They paid $10,000 for paving of a parking lot. What amount does Elway Definition: $90,700 Term: Owners of business firms are the only people who need accounting information. True or False Definition: False
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Term: Trademark Definition: Term: Bale Company buys land for $100,000 on 12/31/06. As of 3/31/07, the land has appreciated in value to $101,000. On 12/31/07, the land has an appraised value of $103,600. By what amount should the Land account be increased in 2007? Definition: $0 Term: Collection on an account receivable will increase both cash and accounts receivable. True or False Definition: False Term: Definition:
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Term: If Kiner Company issues 1,000 shares of $5 par value common stock for $70,000, the account Definition: Common Stock will be credited for $5,000. Term: The matching principle matches Definition: expenses with revenues. Term: An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of Definition: separation of duties is violated. Term: For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation? Definition: A returned $200 check recorded by bank as $20 Term: Franklin Company provided consulting services and billed the client $2,500. As a result of this event Definition: assets increased by $2,500, equity increased by $2,500.
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Term: If a check correctly written and paid by the bank for $626 is incorrectly recorded on the company's books for $662, the appropriate treatment on the bank reconciliation would be to Definition: add $36 to the book's balance. Term: Definition: Term: When an account receivable that was previously written off is collected, it is first necessary to reverse the entry to reinstate the customer's account before recording the collection. True or False Definition: True Term: Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check. True or False Definition: False
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Term: An adjusting entry to a prepaid expense is required to recognize expired expenses. True or False Definition: True Term: Interest Expense Definition: 6,000 Term: If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method. True or False Definition: True Term: Assume a company uses the periodic inventory system and has a beginning merchandise inventory balance of $5,000, purchases of $75,000, and sales of $125,000. The company closes its records once a year on December 31. In the accounting records, the merchan Definition: equal to $5,000.
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Term: A $20,000, 8%, 9-month note payable
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