Accounting II 4 Flashcards

Terms Definitions
T or F
A group of accounts
sales discount
a cash discount on sales
Dividends are declared out of
Retained Earnings.
Merchandise inventory determined by keeping a continuous record of increases, decreases, and balance on hand
Perpetual inventory
buys good from wholesalers for resale discounts
employee benefits
payments to employees for nonworking hours and to insurance and retirement programs
Permanent differences
Differences between taxable and income (before taxes) reported on the income statement that may arise because certain revenues are exempt from tax and certain expenses are not deductable in dertemining taxable income. 613
Judy and Sue have partnership capital account balances of $600,000 and $450,000, respectively and share profits and losses equally. Sara is admitted to the partnership by investing $250,000 for a one-fourth ownership interest. The balance of Sue's Capital
Debenture bonds
Bonds issued against the general credit of the borrower. Also called unsecured bonds.
The percentage of relationship between one financial statement item and the total that includes that item
component percentage
automatic check deposit
depositing payroll checks directly to an employee's checking or savings account in a specific bank
Cost of goods sold
records the cost of merchandise
The monetary amount printed on a stock certificate. 572
Mock is admitted to a partnership with a 25% capital interest by a cash investment of $120,000. If total capital of the partnership is $520,000 before admitting Mock, the bonus to Mock is
Record date
The date when ownership of outstanding shares is determined for dividend purposes.
Term bonds
Bonds that mature at a single specified future date.
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Owner's equity
The person or business who gives goods on consignment
T or F: Separate amounts recorded in special amount columns of a voucher register are posted individually during the month.
T or F: A payroll register summaries the payroll for one pay period
special journal
journal used to record only one kind of transaction
Aging the receivables
The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age.
T or F If salary allowances and interest on capital are stipulated in the partnership profit and loss sharing agreement, they are implemented only if income is sufficient to cover the amounts required by these features.
Payment date
The date dividend checks are mailed to stockholders
Registered bonds
Bonds issued in the name of the owner
The frequency of employer payments of payroll taxes is determined by
the amount owed
A file of stock records for all merchandise on hand
stock ledger
T or F The admission of a new partner results in the legal dissolution of the existing partnership and the beginning of a new partnership.
Corporation forming process
1. application to the secrtary of the stae.2. after app aproval it is granted a chater3. develops by-laws
Face value (par value)
Amount of principal the issuer must pay at the maturity date of the bond.
T or F: An adjusting entry is made at the end of a fiscal period to record the estimated uncollectible acounts expense
On July 1, Goetz Corporation purchases 500 shares of its $5 par value common stock for the treasury at a cash price of $8 per share. On September 1, it sells 300 shares of the treasury stock for cash at $11 per share. Journalize the two treasury stock tra
July 1 Treasury stock 4000 Cash 4000 Sept. 1 Cash 3300 Treasury stock 2400 PIC. from treasury stock 900
T or F: A gain or loss on plant assets is not recorded when one plant asset is traded for a similar plant asset
Garr invests $20,000 in cash (admission by investment) in the Massey-Dix partnership to acquire a 1/4 interest. In this case
the total capital of the new partnership is greater than the total capital of the old partnership.
Which of the following is an example of a temporary difference between taxable income and reported income?
B. using the straight-line depreciation method for income statement reporting and MACRS depreciation for taxable income
Dailey Company is a publicly held corporation whose $1 par value stock is actively traded at $22 per share. The company issued 2,000 shares of stock to acquire land recently advertised at $55,000. When recording this transaction, Dailey Company will
A. debit Land for $55,000.B. credit Common Stock for $44,000.C. debit Land for $44,000.D. credit Paid-In Capital in Excess of Par Value for $53,000.
Which of the following is not an advantage of issuing bonds instead of common stock?
A. Stockholder control is not affected. B. Earnings per share on common stock may be lower. C. Income to common shareholders may increase. D. Tax savings result. (is advantage)
T or F Treasury stock should not be classified as a current asset.
True Tresury is a contra equity account.
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