Exam%203%20Review1

Exam%203%20Review1 - ACCOUNTING 209 TERMS TO KNOW: Long...

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ACCOUNTING 209 REVIEW FOR EXAM 3 TERMS TO KNOW: Long term asset Property, Plant, and Equipment Natural resource Intangible asset Goodwill Depreciation expense Accumulated depreciation Book value Straight line depreciation Units of activity depreciation Double declining balance depreciation MACRS Capital expenditure Revenue expenditure Depletion expense Amortization expense Bad debts expense Allowance for bad debts Net realizable accounts receivable Bank reconciliation Working capital Current liability Age of receivables Age of payables Notes payable Maker Payee Simple interest Principal Maturity value Commitment Contingent liability Compound interest Present value Annuity Bonds payable Serial bond Term bond Debentures Convertible bonds Callable bonds Bond indenture Bond convenant Market interest rate Stated (coupon, contract) interest rate
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EXAM TOPICS Long term tangible assets – Determine acquisition cost, basket purchase Determine depreciation expense, accumulated depreciation, and book value using Straight line, Units of activity, and double declining balance Determine gain/loss on disposal of asset Understand revenue vs capital expenditures Depletion of natural resources Amortization of intangibles (no calculations) Cash/Accounts receivable/ Bad debts Bank reconciliation Accounts receivable and the allowance for bad debts Net accounts receivable = AR - Allowance Age of receivables Time value of money – present value tables will be provided with the exam Bonds payable Understand “promises” of bond contract Determine selling price of bonds Example Problems 1. Reveille Company incurred the following costs to acquire and prepare land during 2004 for a new parking lot: purchase price for land, $750,000; cost to clear the land, $50,000; cost of paving, $35,000; and lighting for the parking lot, $18,000. How much should be recorded in the Land and in the Land Improvements accounts? 2. Jewell Company purchased equipment with a list price of $30,000 on January 1. The seller offered Jewell a cash discount of $600, which Jewell received. Jewell also incurred the following costs related to the equipment: Freight costs, $500; pollution-control device required by the state was added at a cost of $1,250; architect’s fees of $3,000 to redesign work space to accommodate the equipment; three year insurance policy to cover the equipment, $3,000. What amount should Jewell record as the cost of the equipment?
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Exam%203%20Review1 - ACCOUNTING 209 TERMS TO KNOW: Long...

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