Which of the Following is True About Assets

Which of the Following is True About Assets

Get Avails in Accounting Coursera Quiz Answers

In this 2nd course, you will dive deeper into the world of bookkeeping and focus on accounting for assets. If you are familiar with bookkeeping basics, such as double entry accounting, you are gear up for this course.

You volition gain an agreement of common asset types, learn how to business relationship for inventory, summate price of goods sold, and work with Belongings, Found, and Equipment (PP&E). Upon completing this course, you will use your new knowledge of assets to record transactions and produce financial statements for increasingly circuitous business situations.

By the end of this course, y’all will be able to: -Summarize the mutual types of assets a business may have -Describe the importance of control over inventory -Outline how depreciation expense is reported on an income argument -Illustrate how transactions can be recorded in terms of the resulting modify in the elements of the accounting equation. Class i Bookkeeper Basics, or the equivalent, is a recommended prerequisite for this grade.

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Assets in Accounting Week 01 Quiz Answers

Quiz : Categorize These Assets

Q1. Which of these would exist considered a electric current asset? (select all)

  • Accounts receivable
  • Prepaid expenses
  • Accumulated depreciation
  • Vehicle

Q2. How would yous categorize $3,500 worth of computer equipment that the business concern will use as part of its operations?

  • Electric current assets
  • Long-term avails
  • Equity

Avails Exercise Quiz

Q1. To volume Prepaid Expenses, yous must be using which blazon of accounting method?

  • C​ash
  • A​ccrual

Q2. Hire for
Eternal Summer
is $1,200/month, simply if information technology is prepaid, hire is only $12,000 for the twelvemonth. If
Eternal Summer
pays $12,000 on January 1, how would you book this transaction?

Business relationship Debit Credit
C​ash
P​repaid rent
  • D​ebit Cash for $12,000 and Credit Prepaid hire for $12,000.
  • D​ebit Prepaid rent for $12,000 and Credit Cash rent for $12,000.

Q3. What happens on Feb 1? 1/12 ($1,000) of the $12,000 Prepaid hire has been “used upward” or
realized equally an expense
during January.

So we need to _____ Prepaid hire (asset account) and _____ Rental expense (expense business relationship)

  • D​ebit, Credit
  • C​redit, Debit

Q4. What would the balance in the Prepaid rent account be on May 1?

  • $ane​1,000
  • $1​0,000
  • $9,000
  • $8,000

Q5. If nosotros run a Profit & Loss (or Income Statement) for
Eternal Summer
at the end of April, which of these would appear on the statement?

  • R​ental Expense $1,000.
  • P​repaid rent $8,000.

Q6. If we create a Balance Sheet for
Eternal Summer
on April xxx, which of these would appear on the statement?

  • Rental Expense $1,000
  • Prepaid Rent $8,000

Q7. Which of these would exist considered a current asset? (select all that apply)

  • Accounts receivable
  • Prepaid expenses
  • Accumulated depreciation
  • Vehicle

Q8. How would yous categorize $3,500 worth of computer equipment that the business will employ as part of its operations?

  • Current avails
  • Long-term assets
  • Equity

Q9. Use the residuum sheet pictured to respond the following question.​

B​alance Sheet

Current assets Corporeality
​ Cash $​2,500
​ Accounts receivable $​400
​ Inventory $​400
​ Prepaid rent $​10,000
L​ong-term assets
​ Equipment $​iii,900
​ Vehicle $​25,000
​ Accumulated depreciation -​$ii,500
​ Furniture $​ii,200
​ Computers $2,600
T​otal Avails $​44,500

If Eternal Summertime purchased $500 worth of Inventory using Cash, what would the total avails be after the transaction?

  • $​44,000
  • $​44,500
  • $​45,000

Q10. Use the rest sheet pictured to answer the following question.​

B​alance Sail

Electric current avails Amount
​ Greenbacks $​2,500
​ Accounts receivable $​400
​ Inventory $​400
​ Prepaid hire $​x,000
50​ong-term assets
​ Equipment $​3,900
​ Vehicle $​25,000
​ Accumulated depreciation -​$2,500
​ Piece of furniture $​2,200
​ Computers $2,600
T​otal Assets $​44,500

If Eternal Summer purchased $500 worth of Inventory using their supplier credit line, what would the total assets be afterward the transaction?

  • $​44,000
  • $​44,5000
  • $​45,000

Q11. Use the balance sheet pictured to respond the post-obit question.​

B​alance Sheet

Current assets Amount
​ Cash $​two,500
​ Accounts receivable $​400
​ Inventory $​400
​ Prepaid rent $​ten,000
L​ong-term assets
​ Equipment $​3,900
​ Vehicle $​25,000
​ Accumulated depreciation -​$2,500
​ Furniture $​2,200
​ Computers $2,600
T​otal Assets $​44,500

If the accumulated depreciation for Eternal Summer’s mobile massage van increases to $3,000, what would the Full Avails balance be after this entry?

  • $​44,000
  • $​44,500
  • $​45,000

Sales Practice Quiz

Q1. Which path would you select in QuickBooks Online to create a sales receipt?

  • New > Invoice
  • New > Receive payments
  • New > Sales receipt
  • New > Pay bills

Q2. Which piece of information is not mandatory to record a sales receipt?

  • Cost of items purchased
  • Items sold
  • Customer proper name
  • Payment method

Q3. Which account keeps a record of payments in QuickBooks until yous physically eolith the same payments at your real-life bank?

  • Accounts receivable
  • Accounts payable
  • Undeposited funds
  • Piddling cash

Q4. When creating an invoice in QuickBooks Online, which path would you choose to add a new customer?

  • Showtime > New
  • You don’t have to add customer information
  • Client > Add New
  • Save and Send > Terminate

Q5. Sophia does a guest lecture on small business marketing at the Conference of Marketing to Scale. She invoiced the organizers for $200 and their check just arrived in the mail.

To record the payment, which path would you select in QuickBooks Online?

  • New > Pay bills
  • New > Sales receipt
  • New > Receive payments
  • New > Invoice

Q6. When you record a sales receipt or invoice payment for $500, the bookkeeping software will automatically credit the relevant  __________ by $500.

  • Revenue business relationship
  • Expense account
  • Liability account
  • None of these

Promissory Notes Practice Quiz

Q1. In bookkeeping, a signed agreement between two parties, used to document money owed, interest, and payment timeframe is known equally what?

  • Bad Debt
  • General Ledger
  • Notes Receivable
  • Promissory Note

Q2. True or Imitation. The Direct Write-Off method of accounting for “Bad Debt” adheres to the matching principle.

  • T​rue
  • F​alse

Q3. Notes Receivable is money that is owed to that company and is therefore classified as  ______?

  • L​iability
  • A​sset
  • E​quity

Quiz : Accounting Concepts and Measurement Cess

Q1. True or False. An accumulated depreciation business relationship is considered an account with a natural credit rest, pregnant the account increases with debits and decreases with credits.

  • F​alse
  • T​rue

Q2. Suzie Santo owns “Chiquita Chihuahua”, a boutique pet supplies shop with customized canine offerings. She has a vendor, “Paws Free”, that supplies her with high-cease carrying cases for modest dogs. Suzie ordered $8000 worth of cases for the upcoming travel season on credit, simply didn’t programme on a pandemic shutting down all travel and not to mention her business for 6 months. She contacts Ricky at “Paws Free” to work out an organization to settle her account. What blazon of document is used for this type of understanding?

  • Trial Residuum
  • Notes Receivable
  • Promissory note
  • Notes Payable

Q3. Suzie agrees to pay Ricky the $eight,000 in 2 months, at 15% interest. Which of the following is the most accurate way Ricky and Suzie should tape this event on each of their balance sheets?

  • Ricky will record the balance as a Notes Receivable and Suzie will listing the $viii,000 as a Notes Payable.
  • Ricky will record $9,200 as a Notes Receivable, Suzie will record $ix,200 as a Notes Payable.
  • Ricky will add $9,200 as a Cash eolith, and Suzie will tape $9,200 equally a Notes Payable.
  • Ricky will add $viii,000 as a Notes Payable and Suzie will add $eight,000 as a Notes Receivable.

Q4. Continuing with our instance, would Ricky’south notation on the residual canvas fall nether the asset or liabilities column?

  • A​sset
  • Liability

Q5. Would Suzie record this transaction as an nugget or a liability on her balance sheet?

  • Fifty​iability
  • A​sset

Q6. S​uzie has agreed to pay Ricky dorsum the outstanding remainder of $viii,000 over the course of ii months at xv% interest, and take both signed the promissory note.

Which of the post-obit is the best instance of how Ricky should initially record this in his General Journal?

Converting Suzie’due south Business relationship to Notation Debit Credit
N​otes receivable $8,​000
A​ccounts receivable $8,000
Converting Suzie’s Business relationship to Note Debit Credit
N​otes receivable $viii,​000
A​ccounts receivable $8,000
Converting Suzie’due south Account to Note Debit Credit
Accounts receivable $viii,​000
Notes receivable $8,​000
Converting Suzie’s Account to Annotation Debit Credit
Cash $8,​000
A​ccounts receivable $eight,​000

Q7. Suzie is ready to make her first payment to Ricky. She is planning on paying $4000 plus her accrued involvement.

Using the formula
Primary X Interest X 30/365, what would Suzie’south total first payment exist?

Read:   Which of the Following is Not Classified as Direct Labor

(​Enter the full corporeality as $Xxx.XX)

Q8. Suzie is set to make her second and final payment of $4,000 plus involvement to Ricky.

Using the formula
Primary Ten Interest Ten 30/365, what would Suzie’s total second and final payment be?

Q9. Which Promissory Note component would exist entered in department


[ 3 ]

of the statement beneath?

I​,
[_
1
_], agree to pay
[_
ii
_]
the post-obit amount of
[_
3
_]
with interest at
[_
four
_], by
[_
5
_].

  • Primary Value
  • Stated Involvement
  • Maker
  • Payee
  • Time Frame

Q10. Which Promissory Notation component would be entered in section


[ 1 ]

of the statement below?

I​,
[_
1
_], concur to pay
[_
2
_]
the post-obit amount of
[_
three
_]
with interest at
[_
4
_], by
[_
5
_].

  • P​rincipal Value
  • M​aker
  • T​ime Frame
  • P​ayee
  • S​tated Interest

Q11. Which Promissory Note component would exist entered in section


[ five ]

of the argument beneath?

I​,
[_
i
_], hold to pay
[_
2
_]
the following corporeality of
[_
three
_]
with interest at
[_
iv
_], past
[_
5
_].

  • Time frame
  • M​aker
  • Payee
  • Stated Involvement
  • Main Value

Q12. Katie runs an water ice cream shop called “Cream and Cone,” and has fabricated her marker by selling flavored saccharide cones to enhance her customers’ enjoyment of all the unique flavors of ice cream. She notices that her Maple-Bacon sugar cone is a hot item, especially when paired with a scoop of Bourbon-Butter Pecan. She has decided to trademark this signature cone and apply it as her brand’s star item. She’s calling it her ‘Maple-Bacon Bourbon Smash’. Her new trademark is considered what kind of nugget?

  • Intangible
  • Current
  • Tangible
  • Not-current

Q13. Roger owns a food delivery service that uses couriers on electrical skateboards to evangelize locally in the business organisation commune. His skateboards which are valued at $2,700 are considered which of the post-obit?

  • Bad Debt
  • Long-term asset
  • Equipment
  • Current nugget

Q14. Which of the following is right?

  • Total Assets + Total Liabilities = Total Disinterestedness
  • Total Assets = Total Liabilities + Total Equity
  • Total Equity – Full Liabilities = Total Assets
  • Total Liabilities – Full Avails = Total Equity

Q15. True or Simulated. A prepaid expense such equally prepaid hire or insurance is initially classified every bit a liability.

  • F​alse
  • T​rue

Q16. A copyright is an case of what blazon of asset?

  • Tangible asset
  • Intangible asset
  • Current nugget
  • Long term nugget

Q17. What do bookkeepers do when they don’t know how to book something? Select all that employ.

  • They ask for help from a best friend.
  • They enquiry online.
  • They ask the business owner for more description.
  • They ask a boyfriend bookkeeper or accountant.
  • They make their all-time gauge based on the information they accept.

Q18. Truthful or Faux. The Direct Write-Off Method adheres to the matching principle because information technology lets businesses write off debt that is believed to be uncollectible

  • F​alse
  • T​rue

Q19. When a customer purchases something past cash or check, before it’s deposited into the bank, which business relationship should information technology be entered into?

  • Petty Cash
  • Accounts Receivable
  • Undeposited Funds
  • Inventory

Q20. I​f a customer or vendor buys something on credit, merely hasn’t fabricated a payment in over 30 days, which receivable account should be used?

  • “Doubtful” Receivable
  • Accounts Receivable
  • Accounts Uncollectible
  • “​Crumbling” Receivable

Assets in Accounting Week 02 Quiz Answers

Merchandise Inventory Quiz

Q1. The goods held past a business with the intent to sell to customers to earn revenue is defined as

  • Manufacturing inventory
  • Merchandising inventory
  • Warehouse inventory

Q2. True or fake. A perpetual inventory system is ane that updates the inventory account at specified intervals.

  • T​rue
  • F​alse

Q3. The inventory toll flow supposition which supposes that inventory flows through the system from oldest to newest is defined equally what assumption?

  • Start In, First Out (FIFO)
  • Terminal In, First Out (LIFO)

Costing Methods Quiz

Q1. When raw materials are purchased, the entry is a ____ to raw materials and a _____ to accounts payable or cash.

  • Credit; Debit
  • Debit; Credit

Q2. The average cost is reached by dividing the total _____ of goods by the total ____ of goods over a specific bookkeeping cycle.

  • Cost; Number
  • Number; Cost

Q3. True or Faux: With the average costing method, we tin can find the average cost of making a finished good and it doesn’t matter the individual costs of the raw materials.

  • T​rue
  • F​alse

Inventory Errors Quiz

Q1. If an inventory mistake overstates the showtime inventory, which of the following is true?

  • The cost of goods sold volition exist understated and the net income will be overstated.
  • The cost of appurtenances sold will exist overstated and the net income will be overstated.
  • The cost of goods sold will be understated and the net income will exist understated.
  • The price of goods sold will be overstated and the internet income volition be understated.

Q2. On a balance sheet, which of the following is not affected by an inventory mistake?

  • Avails
  • Liabilities
  • Disinterestedness

Q3. True or false. Inventory errors will self-right after ii years (bold no other errors occur).

  • True
  • Fake

Quiz : Inventory Bookkeeping Methods Assessment

Q1. The following is true of inventory in a trade business.

Select all that employ.

  • It is considered an asset on the residuum sheet
  • When sold, in that location should ever be two periodical entries.
  • It is raw materials used to create a finished product

Q2. T​rue or false. Because of the price principle, inventory is reported on the residue canvass at its selling price, not at what information technology price to buy the trade.

  • T​rue
  • F​alse

Q3. Where is the value of a raw material tracked?

  • Deferred revenue
  • Inventory sub-business relationship
  • Equipment
  • Inventory general category

Q4. Inventory errors volition affect all of the following except:

  • Balance Sheet
  • Other accrued liabilities
  • Income Statement
  • The following month’south books

Q5. Schoolhouse’s back in session and Stan at ‘The Bizzy Bee’ has sold 85 of his Fidget Bands this week alone and at the end of September, he had sold 142 total. He purchased 500 of them in August at $1,200 including shipping, and he is selling them for $12.99 each.

What is the buy cost (or inventory value cost) for those 500 units before any sales?

Q6. Schoolhouse’s dorsum in session and Stan at ‘The Bizzy Bee’ has sold 85 of his Fidget Bands this week lonely and at the stop of September, he had sold 142 total. He purchased 500 of them in August at $1,200 including shipping, and he is selling them for $12.99 each.

Where would Stan record the 85 Fidget Bands he sold this week?

  • As a credit on his journal nether the cost of goods sold income account.​
  • There is not plenty information to answer this question.
  • He needs to record the total auction on both the income argument and residue sheet as revenue.​
  • As a credit on his periodical under the toll of appurtenances sold expense account.​

Q7. School’south back in session and Stan at ‘The Bizzy Bee’ has sold 85 of his Fidget Bands this calendar week alone and at the cease of September, he had sold 142 total. He purchased 500 of them in August at $one,200 including shipping, and he is selling them for $12.99 each.

What is Stan’south gross acquirement from the sale of his 142 Fidget Bands?

Q8. School’s dorsum in session and Stan at ‘The Bizzy Bee’ has sold 85 of his Fidget Bands this week lone and at the end of September, he had sold 142 total. He purchased 500 of them in August at $one,200 including shipping, and he is selling them for $12.99 each.

What is Stan’s COGS for those 142 Fidget Bands?

Q9. School’southward back in session and Stan at ‘The Bizzy Bee’ has sold 85 of his Fidget Bands this week alone and at the end of September, he had sold 142 total. He purchased 500 of them in August at $1,200 including shipping, and he is selling them for $12.99 each.

What is the gross profit on Stan’s income statement for the sale of those 142 Fidget Bands? Call up Revenue – COGS = Gross Profit

Q10. When you buy raw materials, and record the purchase of those materials, this entry is a ________________ to raw materials inventory, and a ____________________ to cash or accounts payable.

  • Debit, Credit
  • Notes Payable, Equipment
  • Equipment, Notes Payable
  • Credit, Debit

Q11. Sarah is the owner of “Pish-Posh,” a bath shoppe with specialty candles, soaps, and bathroom bombs. She has decided to utilize the average costing method to calculate her raw inventory value. Looking at the ingredient list below and using the average costing formula, what would exist the average cost per ounce to make her bath bombs?

Read:   Which of the Following is True About a Debit
iv​ oz cornstarch $​1.05
4​ oz citric acid $​ii.35
iv​ oz Epsom salt $​ii.15
8​ oz blistering soda $​1.85
1​ oz Mica powder $​3.25
1 ​oz essential oil $​4.45
1 oz coconut oil $3.15

Q12. “Leaps and Premises” is a seller and installer of funky playground equipment. At the get-go of 2019, they had a total of $105,000 of inventory (more often than not tire swings, jungle gyms, and suspension bridges). During the year they purchased $sixty,000 worth of additional inventory (towers and naught lines). At the end of the year, they had a $3,500 inventory rest. What was their price of goods sold?

Q13. I​n social club to ameliorate keep rail of their inventory levels, “Leaps and Bounds” has also just switched from an inventory monitoring system that updates every quarter, to ane that updates every week. This kind of system is called ________?

  • Periodic Organisation
  • Pervasive Organization
  • Proposed System
  • Perpetual Organization

Q14. Emily is the owner and operator of “Wine Not”, a wine shop for those who like to endeavour wines from lesser-known vintners. She has grown in popularity with her weekly “Wine-down Wednesdays” tastings and inventory is a consistent worry for her. Equally Emily’due south bookkeeper, y’all have to ensure that her inventory levels are accurately accounted for at the get-go and cease of each calendar month.

In March, she ended with a total of 350 bottles with an average cost of $15.00 each. In Apr, she ordered a total of 150 bottles with an average cost of $17.00 each. During the month of April, she sold a total of 225 bottles with an boilerplate toll of $25.00 each.

What is the opening inventory value for April?

Q15. Emily is the owner and operator of “Wine Non”, a wine shop for those who like to try wines from lesser-known vintners. She has grown in popularity with her weekly “Wine-down Wednesdays” tastings and inventory is a consequent worry for her. As Emily’s bookkeeper, you accept to ensure that her inventory levels are accurately accounted for at the beginning and end of each month.

In March, she concluded with a total of 350 bottles with an average cost of $15.00 each. In April, she ordered a total of 150 bottles with an average toll of $17.00 each. During the calendar month of April, she sold a total of 225 bottles with an average cost of $25.00 each.

What were the additional inventory values for April?

Q16. Emily is the possessor and operator of “Wine Not”, a wine shop for those who like to try wines from bottom-known vintners. She has grown in popularity with her weekly “Wine-down Wednesdays” tastings and inventory is a consistent worry for her. As Emily’s bookkeeper, you have to ensure that her inventory levels are accurately accounted for at the beginning and end of each month.

In March, she concluded with a total of 350 bottles with an average cost of $15.00 each. In April, she ordered a total of 150 bottles with an average price of $17.00 each.  During the month of Apr, she sold a full of 225 bottles with an boilerplate toll of $25.00 each.

What was the cost of goods available for sale in April?

Q17. Emily is the owner and operator of “Vino Not”, a wine shop for those who like to try wines from lesser-known vintners. She has grown in popularity with her weekly “Vino-down Wednesdays” tastings and inventory is a consistent worry for her. As Emily’s bookkeeper, you take to ensure that her inventory levels are accurately deemed for at the beginning and end of each month.

In March, she concluded with a total of 350 bottles with a price of $xv.00 each. In April, she ordered a total of 150 bottles with a price of $17.00 each.  During the calendar month of April, she sold a total of 225 bottles with an average cost of $25.00 each.

What was the price of goods sold in April?

Q18. Emily is the owner and operator of “Wine Non”, a wine shop for those who similar to try wines from bottom-known vintners. She has grown in popularity with her weekly “Wine-down Wednesdays” tastings and inventory is a consistent worry for her. Every bit Emily’south bookkeeper, y’all take to ensure that her inventory levels are accurately deemed for at the beginning and end of each month.

In March, she ended with a total of 350 bottles with a toll of $15.00 each. In April, she ordered a total of 150 bottles with a cost of $17.00 each.  During the month of April, she sold a full of 225 bottles with an boilerplate cost of $25.00 each.

What was the endmost inventory in April/opening inventory for May?

Q19. When raw materials are used to create a final product, that product becomes a finished expert. When that good is sold, the journal entry includes _______________ and ______________________.

Select all that use.

  • Credit to price of appurtenances sold, Debit of inventory (finished appurtenances)
  • Debit to cost of appurtenances sold, Credit to inventory (finished appurtenances)
  • Credit to cash/accounts receivable, Debit to sales income
  • Debit to greenbacks/accounts receivable, Credit to sales income

Q20. To correct inventory errors, a bookkeeper needs to do all of the post-obit except which of the following?
(select the best answer)

  • Create a reverse journal entry
  • Correct the errors by erasing the sometime journal entries and make sure the numbers are right moving frontwards
  • Create new financial reports pertaining to the affected periods
  • Include a disclaimer explaining why new financial reports are being run

Assets in Accounting Calendar week 03 Quiz Answers

PP&E Exercise Quiz

Q1. Select all of the current assets:

  • Accounts Receivable
  • Bottles of Everlasting Summer massage oil for resale
  • Cash
  • Massage table

Q2. Select all of the non-electric current assets:

  • Two acres of state endemic for a future office site
  • Office space rental
  • Cost of Goods Sold
  • Production patent

Q3. Which assets would be considered PP&E?

  • Land, buildings, equipment
  • Land, buildings, cash
  • Salaries, hire, snacks
  • Inventory, office supplies, accounts receivables

Q4. True or false. PP&E and expenses are treated the aforementioned when information technology comes to taxes.

  • True
  • Simulated.

Q5. If PP&E is miscalculated or entered incorrectly, it generally impacts:

  • Potential investor perception
  • Balance sail
  • Assay of fixed asset spending
  • All of the above

Depreciation Quiz

Q1. True or false: Depreciation expense is recorded on the balance canvass below PP&E.

  • T​rue
  • F​alse

Q2. True or simulated: When adding a fixed nugget business relationship in QuickBooks Online, you should check the box to track depreciation.

  • T​rue
  • F​alse

Q3. What will the accumulated depreciation of the Float Tank be later on 4 years?

Reminder:

Original cost: $12,000

$ii,000 almanac depreciation

Q4. If an asset has a salvage value of $300, that ways:

  • Its book value is $300.
  • Information technology was purchased for $300.
  • Its accumulated depreciation is $300.
  • It could be sold for $300 at the end of its useful life.

Q5. When using QBO software, depreciation expense must be entered as a:

  • Stock-still asset
  • Revenue account
  • Journal entry
  • Check

Quiz : Holding and Equipment Cess

Q1. Neb is and then excited about opening up his BBQ joint, “Sop ‘n Mop Rib Shack”. He simply has a few things left to exercise before opening day. One job is to sign the charter for his iii BBQ Smokers that just arrived. He is leasing them from the best BBQ Smoker supplier in town, Smokey’south Pit Boss. The lease is a capital lease with a term of 6 years with 10% interest.

In this instance, Bill is considered the _________________ on the charter, and Smokey’s PitBoss is considered the ___________________.

  • Lessor, Lessee
  • Financer, Financier
  • Lessee, Lessor
  • Party, Exchanger

Q2. Bill is so excited well-nigh opening upward his BBQ joint, “Sop ‘northward Mop Rib Shack”. He only has a few things left to practice before opening day. One task is to sign the lease for his 3 BBQ Smokers that simply arrived. He is leasing them from the all-time BBQ Smoker supplier in town, Smokey’south Pit Boss. The charter is a capital letter lease with a term of 6 years with 10% interest.

Since Neb’s charter is a upper-case letter lease, this means at the end of the half-dozen years he _______________________.

  • Ain the equipment himself.
  • Is able to upgrade the smoker’s, since they are at present of little value, and go along with a new charter on new equipment.
  • Has to sign another lease with new terms, accounting for the depreciation of the smokers, in order to continue using the equipment.
  • Has to negotiate a buy-out for the remaining rest owed to own the smokers.​
Read:   Solve for the Missing Amounts for the Following Separate Cases

Q3. Beak is and then excited almost opening upward his BBQ joint, “Sop ‘n Mop Rib Shack”. He only has a few things left to do before opening day. One chore is to sign the lease for his iii BBQ Smokers that but arrived. He is leasing them from the best BBQ Smoker supplier in town, Smokey’due south Pit Boss. The charter is a majuscule lease with a term of vi years with 10% involvement.

Since Nib’s charter is a capital Lease, all of the post-obit are true except:

  • Beak tin claim the smokers every bit an asset, as well equally account for depreciation of this nugget on his rest canvas.
  • All risks and benefits are transferred to Bill.​
  • The smokers are considered a liability under accounts payable, since Bill is paying for them over time.
  • Beak is responsible for the insurance, maintenance, and taxes of the smokers.

Q4. Larry Smith purchased equipment for $50,000 on January 1, 2020. He believes that the equipment will have a salvage value of $two,000 and its useful life will be 7 years. What will his yearly Depreciation Expense be assuming direct-line depreciation?

Q5. On January 1, 2020, Marcy caused a small-scale bass boat for $10,000 to use every bit a business concern expansion for her fishing shop, “Bass and Brim”. Her goal is to offering charters for tourists and new anglers. The boat’s useful life is expected to be x years, and the save value is expected to be $0. After 4 years of use, information technology was determined that the boat would be useful for only three more years, meaning that the total useful life of the boat will exist seven years instead of 10. Marcy uses the straight-line method of depreciation.

Based on this information what amount should Marcy list as the Depreciation Expense for 2025?

Q6. PP&East are considered which of the following:

  • Current Assets
  • Inventory
  • Liabilities
  • Non-electric current Assets

Q7. True or Faux: In order to adhere to the matching principle, depreciation expense is shown on the income statement.

  • F​alse
  • T​rue

Q8. Gavin is the owner of ‘Single Track’, a mount and dirt biking park. He has decided to try and get more riders in the winter snow season and has purchased 10 fat-tire bikes. He paid $fourteen,345 for the bikes themselves, 7% sales revenue enhancement, $1,200 delivery fee, and $500 delivery insurance coverage.

Q9. When setting up his stock-still asset account for these new rental bikes, what is Gavin’s original cost?

Under an operating lease, the monthly payments are considered a(n) ____________________.

  • Other Accrued Liability
  • Operating Expense
  • Deferred Revenue
  • Other Asset

Q10. True or False: For tax purposes, an operating charter is NOT considered a rental expense.

  • F​alse
  • T​rue

Q11. The following are true about operating leases except:

  • They do not tape interest expense
  • They reduce the value of the asset year over twelvemonth
  • They record interest equally an expense
  • They tape the charter expense every bit an operating expense

Q12. A lease in which the transfer of ownership is not intended at the cease of the lease life is called _________.

  • Operating Lease
  • Capital letter Charter
  • Equipment Lease
  • Transfer Charter

Q13. When because the service life of an asset, the guess is based on all of the following considerations: (Select all that apply)

  • How complex the item is (high tech vs low tech).
  • How long the item will last relative to other similar items.
  • How often the item will be used.
  • The total cost of the item relative to other like items.

Q14. The party who owns the nugget that is beingness rented or leased is known every bit ________.

  • Lessee
  • Lessor
  • Lease
  • Capital Lease

Q15. True or Faux: Some assets render value subsequently their service life.

  • T​rue
  • F​alse

Q16. Which of the following are examples of PP&East? (Select all that apply)

  • State
  • Cash
  • A company truck
  • Inventory

Q17. Sanjay has a food truck, “Pakora”, that specializes in his culture’s cuisine. He is leasing the truck through a capital lease. His original cost was $35,500 and the expected useful life of this vehicle is 8 years.

What is Sanjay’s annual depreciation on his food truck?

Q18. Sanjay has a food truck, “Pakora”, that specializes in his culture’south cuisine. He is leasing the truck through a uppercase lease. His original cost was $35,500 and the expected useful life of this vehicle is viii years. Calculate his annual depreciation.

What would the volume value be of Sanjay’s food truck after one year?

Q19. For a capital lease, you lot must include the following journal entries except:

  • One entry to record the monthly payment
  • One entry to record the initial payment
  • One entry to record the interest alone
  • One entry to record the lease

Q20. True or Fake: Land is considered a noncurrent asset.

  • True
  • F​alse

Assets in Accounting Week 04 Quiz Answers

Cash, accounts receivable, and cash receipts quiz

Q1. If yous collect cash for a $500 sale, what accounts increase by $500?

  • Assets and equity
  • Equity and liabilities
  • Liabilities and expenses
  • Expenses and equity

Q2. Your company had a commencement cash residuum of $10,000 in October. You sold $5,500 in services for cash and $4,000 to exist invoiced. What is your company’s cash remainder at the end of October?

  • $xix,500
  • $14.000
  • $xv,500

Q3. Your company had a beginning disinterestedness remainder of $8,000 in November. You sold $6,000 in services for cash and $three,500 to be invoiced. What is your company’s equity balance at the end of October?

  • $11,500
  • $17,500
  • $14,000

Q4. How is the accounting equation useful for detecting entry or calculation errors?

  • It never allows debits to exist recorded every bit assets.
  • It always reveals missing journal entries.
  • It always reveals if a payment is applied to the wrong invoice.
  • An unbalanced equation tin tip you off that an error exists somewhere.

PP&E Concepts Quiz

Q1. Big Boss Edifice Company purchased some construction equipment to keep up with demand. The new bookkeeper booked this as an expense. Is this right?

  • Yes
  • No

Q2. Aubergine’southward Antiques took out a capital lease for a moving van to send heavier antiques. Will they be able to depreciate this equipment?

  • Yeah
  • No

Q3. Adé just purchased $75 worth of new staplers for her Honey Helpers Bees business organization. She wants to book this as a noncurrent nugget. Is that the correct way to book information technology?

  • Yes
  • No

Q4. Jason’s Medicinal Juniper Farm recently leased a stump drilling machine for 12 months on an operating lease. Volition he exist able to account for disposition of this equipment at the end of the charter?

  • Yes
  • No

Quiz : Assets in Accounting Case Written report Quiz

Q1. Trunk and Swole made __________ in cyberspace income from May 1 – July 31.

  • $1,785.46
  • $2,979.46
  • $1,475.46
  • -$1,250.46

Q2. What was the total COGS for Trunk and Swole on the trial rest?

  • $100
  • $180
  • $50
  • $fourscore

Q3. The total debits for the trial remainder equals:

(format your response equally $xx,thirty.xx)

Q4. On the inventory tracking tab, because of the inventory error, the incorrect net income for May – July is _____________. (format your response $x,xxx.xx)

Q5. On the inventory tracking tab, because of the inventory error, the incorrect cyberspace income for August – September is ________________. (format your response $10,xxx.xx)

Q6. Trunk and Swole bank check their inventory at the cease of every calendar month as part of their management system. This kind of management system is called:

  • Perpetual
  • Periodic
  • Proactive
  • Episodic

Q7. If a vendor has not paid a business for services or appurtenances rendered, and the two parties come to an understanding regarding terms to recover the unpaid residue (including time frame and involvement). That understanding is called a ___________________.

  • Promissory Note
  • Notes Receivable
  • Notes Payable
  • Contra-Account

Q8. What was Body and Swole’s total assets on the balance sheet at the end of July?

  • $38,785
  • $xl,285
  • $41,785
  • $37,285

Q9. When entering a promissory note in the journal as a notes receivable, each entry for a payment received includes all of the post-obit except:

  • The interest on the original, total principal owed.
  • The interest paid on principal owed (the remaining balance).
  • A debit to the cash account for the principal and interest paid.
  • A credit to the notes receivable account for the chief paid.

Q10. Body and Swole purchased $25,000 worth of equipment to open its doors. The expected life of their equipment is 5 years with an anticipated salvage value of $6,000. What would they report as their equipment’s annual depreciation at the end of the year? (Report your reply every bit $10,xxx)

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