Define long-lived assets. Why are they considered to be a "bundle of future services"?

Define long-lived assets. Why are they considered to be a "bundle of future services"? Long-lived assets are noncurrent assets, which a business retains...

How is the fixed asset turnover ratio computed? Explain its meaning.

How is the fixed asset turnover ratio computed? Explain its meaning. The fixed asset turnover ratio = Net sales / [(Beginning net fixed asset balance...

What are the classifications of long-lived assets? Explain each.

What are the classifications of long-lived assets? Explain each. Long-lived assets are classified as follows: (1) Tangible long-lived assets—assets...

Distinguish between ordinary repairs and improvements. How is each accounted for?

Distinguish between ordinary repairs and improvements. How is each accounted for? a. Capital expenditures—expenditures of resources (i.e., assets...

Distinguish among depreciation, depletion, and amortization.

Distinguish among depreciation, depletion, and amortization. Depreciation—allocation of the cost of a tangible long-lived asset over its useful life....

In computing depreciation, three values must be known or estimated; identify and explain the nature of each.

In computing depreciation, three values must be known or estimated; identify and explain the nature of each. To compute depreciation, the three values...

Over what period should an addition to an existing long-lived asset be depreciated? Explain.

Over what period should an addition to an existing long-lived asset be depreciated? Explain. The cost of an addition to an existing long-lived asset...

When equipment is sold for more than net book value, how is the transaction recorded? For less than net book value? What is net book value?

When equipment is sold for more than net book value, how is the transaction recorded? For less than net book value? What is net book value? When equipment...

Define goodwill. When is it appropriate to record goodwill as an intangible asset?

Define goodwill. When is it appropriate to record goodwill as an intangible asset? Goodwill represents an intangible asset that exists because of...

Why is depreciation expense added to net income (indirect method) on the statement of cash flows?

Why is depreciation expense added to net income (indirect method) on the statement of cash flows? Depreciation expense is a noncash expense. That...

What is an annuity?

What is an annuity? An annuity is a term that refers to equal periodic cash payments or receipts of an equal amount each period for two or more periods....

Explain the basic difference between future value and present value.

Explain the basic difference between future value and present value. Future value—The future value of a number of dollars is the amount that it will...

Explain the concept of the time value of money.

Explain the concept of the time value of money. The time value of money is another way to describe interest. Time value of money refers to the fact...

What is a contingent liability? How is a contingent liability reported?

What is a contingent liability? How is a contingent liability reported? A contingent liability is not an effective liability; rather it is a potential...

Define Note Payable. Differentiate between a secured and unsecured note.

Define Note Payable. Differentiate between a secured and unsecured note. A note payable is a written promise to pay a stated sum at one or more specified...

Define Deferred Revenue. Why is it a liability.

Define Deferred Revenue. Why is it a liability. A deferred revenue (usually called unearned revenue or revenue collected in advance) is a revenue that...

Define Accrued liability. What type of entry usually reflects and accrued liability?

Define Accrued liability. What type of entry usually reflects and accrued liability? An accrued liability is an expense that was incurred before the...

Liabilities are measured and reported at their current cash equivalent amount. Explain.

Liabilities are measured and reported at their current cash equivalent amount. Explain. A liability is measured at acquisition at its current cash...

Define Liability. Differentiate between a current liability and a long term liability.

Define Liability. Differentiate between a current liability and a long term liability. Liabilities are obligations that result from past transactions...

Define intangible asset. What period should be used to amortize an intangible asset with a definite life?

Define intangible asset. What period should be used to amortize an intangible asset with a definite life? An intangible asset is acquired and held...

When equipment is sold for mare than net book value how is the transaction recorded? For less than? What is net book value?

When equipment is sold for mare than net book value how is the transaction recorded? For less than? What is net book value? When equipment is sold,...

What is asset impairment? How is it accounted for?

What is asset impairment? How is it accounted for? Asset impairment—when events or changes in circumstances cause the book value of long-lived assets...

What type of depreciation expense patter is used under each of the following methods and when is its use appropriate?

What type of depreciation expense patter is used under each of the following methods and when is its use appropriate?  A Straight line B Units...

Distinguish among depreciation, depletion and amortization.

Distinguish among depreciation, depletion and amortization. Depreciation—allocation of the cost of a tangible long-lived asset over its useful life....

Describe the relationship between the matching principle and accounting for long lived assets.

Describe the relationship between the matching principle and accounting for long lived assets. In measuring and reporting long-lived assets, the matching...

Under the cost principle, what amounts should be included in the acquisition cost of a long lived asset?

Under the cost principle, what amounts should be included in the acquisition cost of a long lived asset? When a long-lived asset is acquired, it is...

What are the classifications for long lived assets. Explain each.

What are the classifications for long lived assets. Explain each. Long-lived assets are classified as follows: (1) Tangible long-lived assets—assets...

Define Long lived Assets. Why are they considered to be a "bundle of future services"?

Define Long lived Assets. Why are they considered to be a "bundle of future services"? Long-lived assets are noncurrent assets, which a business retains...

Explain briefly the application of the LCM concept to the ending inventory and its effect on the income statement and the balance sheet when market is lower than cost.

Explain briefly the application of the LCM concept to the ending inventory and its effect on the income statement and the balance sheet when market...

Contrast the effect of LIFO vs FIFO on cash outflow and inflow.

Contrast the effect of LIFO vs FIFO on cash outflow and inflow. When prices are rising, LIFO causes a lower taxable income than does FIFO. Therefore,...

Contrast the income statement effect of LIFO vs FIF ie pretax income when A prices are rising and B when prices are falling.

Contrast the income statement effect of LIFO vs FIF ie pretax income when A prices are rising and B when prices are falling. LIFO versus FIFO will...

Contrast the effects of LIFO vs FIFO on reported assets ie. inventory when A prices are rising and B prices are falling.

Contrast the effects of LIFO vs FIFO on reported assets ie. inventory when A prices are rising and B prices are falling. LIFO and FIFO have opposite...

Discuss four inventory costing methods. List the four methods and briefly explain each.

Discuss four inventory costing methods. List the four methods and briefly explain each. Average cost FIFO LIFO Specific identification (a) Average...

Define Goods available for sale. How does it differ from cost of goods sold?

Define Goods available for sale. How does it differ from cost of goods sold? Goods available for sale is the sum of the beginning inventory and the...

Explain the application of the cost principle to an item in the ending inventory.

Explain the application of the cost principle to an item in the ending inventory. The cost principle governs the measurement of the ending inventory...

What are the guidelines for deciding which items should be included in inventory?

What are the guidelines for deciding which items should be included in inventory? Fundamentally, inventory should include those items, and only those...

Does an increase in the receivables turn over ratio generally indicate faster or slower collection of receivables.?

Does an increase in the receivables turn over ratio generally indicate faster or slower collection of receivables.? An increase in the receivables...

What is the effect of the write off of bad debts (using the allowance method) on A net income and B accounts receivable, net.

What is the effect of the write off of bad debts (using the allowance method) on A net income and B accounts receivable, net. The write-off of bad...

Using the allowance method is bad debt expense recognized in A the period in which sales related to the noncollectable account are made or B the period in which the seller learns that the customer is unable to pay?

Using the allowance method is bad debt expense recognized in A the period in which sales related to the noncollectable account are made or B the period...

Which basic accounting principles the allowance method of accounting for bad debts designed to satisfy?

Which basic accounting principles the allowance method of accounting for bad debts designed to satisfy? In conformity with the matching principle,...

What is a sales discount? Use 1/10,n/30 for an explanation.

What is a sales discount? Use 1/10,n/30 for an explanation. A sales discount is a discount given to customers for payment of accounts within a specified...

What is a credit card discount? How does it affect amounts reported on the income statement?

What is a credit card discount? How does it affect amounts reported on the income statement? A credit card discount is the fee charged by the credit...

What is gross profit or gross margin on sales? How is gross profit ratio computed?

What is gross profit or gross margin on sales? How is gross profit ratio computed? Gross profit or gross margin on sales is the difference between...

Explain the difference between sales revenue and net sales.

Explain the difference between sales revenue and net sales. The difference between sales revenue and net sales is the amount of goods returned by...