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15 Cards in this Set
- Front
- Back
Bailey Company purchases a new delivery truck for $35,000. The sales taxes are $2,000. The logo of the company is painted on the side of the truck for $1,200. The truck license is $120. The truck undergoes safety testing for $220. What does Bailey record as the cost of the new truck? |
38,420 |
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what are the subdivisions of plant assets. |
Land, land improvements, buildings, equipment |
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when a significant amount of time is required to get the building ready for use |
When would interest costs would be included as part of the historical cost for a building |
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Modern Industries, an electronics manufacturer, ________ research and development costs, and ________ legal fees when successful patents are developed. |
expenses; capitalizes |
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Although some items are purchased as assets that will benefit a business for a long time, they should be expensed immediately instead of classified as a ________. This is an example of the ________ concept |
capital expenditure; materiality |
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Classifying capital expenditures as revenue expenditures will ________ assets and ________ net income. |
understate; understate |
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An ordinary repair is considered to be which type of expenditure? |
revenue expenditure |
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Additions and improvements to a plant asset that increase the asset's operating efficiency, productive capacity, or expected useful life are generally |
debited to the plant asset affected |
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ch 7: Printing check amounts by machine in indelible ink is an example of |
physical controls |
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ch 7 Making payments from a petty cash fund requires |
no entry |
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A company reports a debit balance in Cash Over and Short as a(n) |
miscellaneous expense |
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A bank may issue a credit memorandum for |
the collection of a note receivable by the bank for the depositor. |
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The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor is |
bank service charge |
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outstanding checks |
deducted from the bank balance. |
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If an intangible asset has a finite life, it should be amortized. The amortization period of an intangible asset can exceed 20 years. Goodwill is recorded only when a business is purchased |
true Totals of major classes of assets can be shown in the balance sheet, with asset details disclosed in the notes to the financial statements. |