Accounting Group Recitation

1. The direct Charge-Off method is preferred over the allowance method because this method can report the bad debt expense closer to the time of the sale or service.

• True

• False

1. This is the third method of estimating your expected uncollectible accounts.

• 1. Maturity Date

• 1. Aging Accounts Receivable

• 1. Aging Accounts Payable

• 1. Assets

1. Refers to the loss of usefulness, and not necessarily to a decrease in the market value. Depreciation, Straight-Line Method, Expenses, Accounts Payable (multiple choice)

• 1. Expenses

• 1. Depreciation

• 1. Accounts Payable

• 1. Straight-Line Method

The most widely used method of computing depreciation expenses for financial statement purposes.

• Straight-Line Method

• Declining-Balance

• Sum-of-the-Year’s-Digits

• Unit-of-Output

It is important to keep the recording of accounts receivable transactions and the collection of cash from customers separate in order to maintain effective internal control over accounts receivable.

• True

• False

1. A method of recording uncollectible accounts that estimate losses from uncollectible accounts and charges them to expense in the period when the sales are recorded.
   

• 1. Direct charge-off method

• 1. Valuation Account

• 1. Allowance method

• 1. Aging Accounts Receivable

1. The write off has a huge impact on the financial statement. 

• True

• False

Nyna Corporation purchases a machine for $100,000 with an estimated salvage value of $20,000 and a useful life of 5 years, what is the depreciation cost annually?

• 16,000

• 20,000

• 80,000

• 4,000