Accounting Quiz 3 Laurie Wood

FOB destination – Freight Costs paid by Seller
Buyer assumes ownership of inventory when it reaches his/her place of business
Seller has risk of loss
Cost of shipping is included in Freight Expense
Collusion – Two or more people from acting together to circumvent internal control. Ex- two coworkers date. Gain power
Un-liquidated obligations – For financial reports prepared on a cash basis this is the amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been recorded.
postdated check – A check that has a future date instead of the actual date; it should not be deposited until the date on the check.
Plant Assets – Tangible long lived assets used to produce or sell products and services. Also called property, plant, and equipment (PP&E)
*objectivity concept* – A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.
Indirect Cost – Cannot be easily and conveniently traced to one product; These costs are incurred to support the manufacturing of ALL products; Manufacturing overhead and most period costs are indirect costs.
If initial budgets prove unacceptable, planners achieve the MOST benefit from:
a. planning again in light of feedback and current conditions
b. deciding not to budget this year
c. accepting an unbalanced budget
d. using last year's budget – a. planning again in light of feedback and current conditions
Outstanding check – A check that has been issued but not presented for payment to a bank is called an
Overtly Threatened Litigation – General request OK
Awareness and present intention
UNLESS likelihood is remote
[33] The ABC Company is trying to decide between keeping an existing machine and replacing it with a new machine. The old machine was purchased just 2 years ago for $50,000 and had an expected life of 10 years. It now costs $1,000 a month for maintenance and repairs due to a mechanical problem. A new machine is being considered to replace it at a cost of $60,000. The new machine is more efficient, and it will only cost $200 a month for maintenance and repairs. The new machine has an expected life of 10 years. In deciding to replace the old machine, which of the following factors, ignoring income taxes, should ABC not consider? A. Any estimated salvage value on the old machine. B. The original cost of the old machine.   C. The estimated useful life of the new machine. D. The lower maintenance cost on the new machine.
Goodwill – Occurs when one company buys another company
sole propriertorship – one owner of a business
[33] The ABC Cоmpаny is trying tо decide between keeping аn existing mаchine and replacing it with a new machine. The оld machine was purchased just 2 years ago for $50,000 and had an expected life of 10 years. It now costs $1,000 a month for maintenance and repairs due to a mechanical problem. A new machine is being considered to replace it at a cost of $60,000. The new machine is more efficient, and it will only cost $200 a month for maintenance and repairs. The new machine has an expected life of 10 years. In deciding to replace the old machine, which of the following factors, ignoring income taxes, should ABC not consider? A. Any estimated salvage value on the old machine. B. The original cost of the old machine.   C. The estimated useful life of the new machine. D. The lower maintenance cost on the new machine.
accounting – kontírozás (könyvelés)

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