Accounting Terms and Definitions- ACCT 212 BEST 2021 STUDY GUIDE

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Terms Definitions Another name for short-term investments is:marketable securities. marketable securities. Investments in marketable securities fall into three categories, including: trading, Availa ... ble for sale, held to maturity trading security for $12,000. The entry to record this transaction will include debit to the Investment account. An unrealized gain: is recorded when the fair value of the trading security is more than its cost. Trading securities are: adjusted to their current fair value before the financial statements are prepared. Unrealized gains or losses on trading securities are reported on the: income statement as Other Revenue, Gains, and Losses. ABC Company has shipped goods to one of its customers FOB shipping point. ABC Company will recognize sales revenue when: when the goods leave ABC's shipping dock. When goods are shipped FOB destination: revenue is recognized when the goods are received by the customer. If a buyer takes advantage of a sales discount, the journal entry recorded by the seller will include a(n): debit to Cash and a debit to Sales Discount. Which of the following is a true statement about sales? Sales discounts are offered to customers in order to speed up cash flow. If a buyer takes advantage of a sales discount, the journal entry recorded by the seller will include a(n): debit to Cash and a debit to Sales Discount. A ledger that contains a separate account for each customer is called a: subsidiary ledger. The most important internal control over cash is to: separate cash-handling duties from cash-accounting duties. The biggest risk of selling on credit is: the risk of not collecting some of the receivables. The aging-of-receivables method is: a balance sheet approach, since it focuses on accounts receivable. Under the allowance method: the company sets up an allowance for uncollectible accounts to estimate the amount of the receivables the company does not expect to collect. Allowance for uncollectible accounts is classified as: a contra-asset account. Which account shows the amount of accounts receivable that the business does NOT expect to collect? Allowance for Uncollectible Accounts The percent-of-sales method of computing uncollectible accounts is used for: interim statements because it is easier than the aging method. The percent-of-sales method: employs the expense recognition (matching) concept. The entry to write off an account under the allowance method for estimating uncollectible accounts: has no effect on total assets or net income. The aging-of-receivables method: focuses on the amount of receivable that will not be collected. Under the allowance method: the company sets up an allowance for uncollectible accounts to estimate the amount of the receivables the company does not expect to collect. Allowance for uncollectible accounts is classified as: a contra-asset account. Which account shows the amount of accounts receivable that the business does NOT expect to collect Allowance for Uncollectible Accounts The percent-of-sales method of computing uncollectible accounts is used for: interim statements because it is easier than the aging method. The percent-of-sales method: employs the expense recognition (matching) concept. The entry to write off an account under the allowance method for estimating uncollectible accounts: has no effect on total assets or net income. The aging-of-receivables method: focuses on the amount of receivable that will not be collected. Under the allowance method, the entry to write off a $2,600 uncollectible account includes a: debit to Allowance for Uncollectible Accounts for $2,600. A company makes a journal entry to debit Uncollectible-Account Expense and credit Accounts Receivable. This entry indicates that they are using the ________ method. direct write-off [Show More]

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