Contra asset account - Study guides, Class notes & Summaries

2024|2025 INTUIT BOOKKEEPING LATEST EXAM | QUESTIONS WITH CORRECT ANSWERS When choosing between two solutions, the one that will be least likely to overstate assets and income should be selected. Correct Answer: Conservatism Assumption States that an amount can be ignored if its effect on the financial statements is small and not misleading Correct Answer: Materiality Principle Once you adopt an accounting principle or method, continue to follow it consistently in future accounting peri...

Question 1 Assume US GAAP to answer this question. In 2017, $2 million in wages were earned and no cash wages were paid. In 2018, $8 million in wages were earned and $7 million in cash wages were paid. Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018. Any earned but unpaid wages will be paid during the first quarter of 2019. Using only the information provided, which of the following statements is most accurate? • Liabilities inc...

Wall Street Prep The Premium Package Review: Accounting & Financial Statement Analysis Exam Latest 2023/2024 Questions and Answers (Score: 95%, 38 correct out of 40). Score: 95%, 38 correct out of 40 Question 1 Assume US GAAP to answer this question. In 2017, $2 million in wages were earned and no cash wages were paid. In 2018, $8 million in wages were earned and $7 million in cash wages were paid. Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages...

Which asset is most liquid (in accounting sense) - Cash The account, Sales returns and allowances, represents... - returned mechandise ABC offers 2/10 net 20. Which means... - The customer can take a 2 % discount if they pay in 10 days When goods or services are sold from one business to another on credit or sales are recorded at the gross amount, a sales discount.... - 1) Is offered so that the customer will pay the bill promptly 2) Is recorded as a contra-asset in sales The direct write ...

The normal balance of the account "Allowance for Uncollectable Accounts" is a _____ because _____. A. Debit; it is a contra account to Revenue (a credit account) B. Credit; it is a contra account to Accounts Receivable (a debit account) C. Debit; it is an expense in the income statement D. Credit; it is a contra account to Bad Debt Expense (a debit account) -Answer- B. Credit; it is a contra account to Accounts Receivable (a debit account) Many intangible assets are not recorded on ...

(T/F) Declaration of cash dividends increases total liabilities. - Answer-true (T/F) Payment of cash dividends decreases total assets and total equity. - Answer-false (T/F) The cumulative effect of the declaration and payment of a cash dividend will decrease total assets and shareholders' equity on a company's financial statements. - Answer-true (T/F) The issue/selling price of a bond is calculated as the sum of future cash flows. - Answer-false (T/F) Short term debt which is expec...

ACCY 200 Chapter 5 Questions and Answers Graded A+ 1. What happens to the allowance for bad debts in relation to accounts receivable? It is subtracted from It is added to It is adjusted against It is accounted for by Answer: It is subtracted from 2. How is "Net accounts receivable" defined on the balance sheet? It's the balance of an asset account minus a liability account It's the balance of an asset account plus a revenue account It's the balance of an asset account le...

4 accounting assumptions - going-concern assumption, monetary unit assumption, time period assumption, business entity assumption 4 basic cost flow assumptions - specific identification, first-in first-out (FIFO), last-in first-out (LIFO), weighted average 4 general accounting principles - measurement principle, revenue recognition principle, expense recognition principle, full disclosure principle 4 general purposes of financial statements - income statements, statement of retained earnin...

The normal balance of the account "Allowance for Uncollectable Accounts" is a _____ because _____. A. Debit; it is a contra account to Revenue (a credit account) B. Credit; it is a contra account to Accounts Receivable (a debit account) C. Debit; it is an expense in the income statement D. Credit; it is a contra account to Bad Debt Expense (a debit account) - B. Credit; it is a contra account to Accounts Receivable (a debit account) Many intangible assets are not recorded on the bal...

An adjusting entries for unearned revenue affects correct answers Revenue and Liabilities How will it affect total Assets in the balance sheet if tangible fixed assets are not depreciated at the end of the period? correct answers Total Assets are overstated How will it affect Income Statement if an accrued expense of $450 is forgotten to record at the end of the period? correct answers Net Income in the Income Statement will be overstated for $450 What accounting principle requires cred...