Chapter 15 Review

Revenue earned in one fiscal period but not received until a later fiscal period is called accrued revenue.

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Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.

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Estimated federal income tax must be paid in monthly installments.

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All accounts are listed on the unadjusted trial balance regardless of whether there is a balance or not.

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Functional depreciation should be considered in estimating the useful life of computer equipment.

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For a business using the periodic inventory method, purchases are recorded in the Merchandise Inventory account.

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The Income Summary account is one of the accounts used to adjust the Merchandise Inventory account at the end of the fiscal period.

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The annual straight-line depreciation of equipment costing $7,000.00 with a salvage value of $1,000.00 and a useful life of 5 years would be $1,400.00.

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The value of the insurance coverage used is recorded as a debit to Insurance Expense.

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The book value of a plant asset is its original cost minus accumulated depreciation.

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