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Designate the Terminology That Best Represents the Definition or Statement

Question 237

Matching

Designate the terminology that best represents the definition or statement given below.
(Note: No letter should be used more than once)

Premises:

Responses:

The methods and measures adopted within a business to safeguard its assets and enhance the accuracy and reliability of its accounting records.

Additions and improvements

The pool of costs that consist of the cost of the beginning inventory and the cost of goods purchased.

Natural resources

Entries at the end of an accounting period to transfer the balances of temporary accounts to permanent owner's equity accounts.

Allowance method

Assets such as timber, oil, coal, and mineral deposits.

Amortization

A system in which detailed records are not maintained and cost of goods sold is determined only at the end of an accounting period.

Periodic inventory system

Revenue, expense, and drawing accounts whose balances are transferred to owner's capital at the end of an accounting period.

Book value

An accounting principle that requires assets be recorded at their historical cost.

Nominal accounts

An inventory costing method which assumes that the latest units purchased are the first to be allocated to cost of goods sold.

Closing entries

All accounts appearing on the post-closing trial balance.

Comparability

An assumption that requires that the activities of a company be kept separate and distinct from the activities of its owner.

Permanent accounts

Accumulated depreciation is an example of this term.

Consistency

This method of accounting for uncollectible accounts is required when bad debts are significant in size.

Contra asset

An inventory method that records the earliest goods purchased as cost of goods sold.

Historical cost principle

A depreciation method that produces decreasing periodic depreciation by applying a constant rate to the book value of the asset.

Debit

The periodic write-off of an intangible asset.

Declining-balance method

The left side of an account.

Depletion

The cost of an asset less its accumulated depreciation.

Depreciable cost

An assumption that the economic life of a business can be divided into artificial time periods.

Direct write-off method

The total amount subject to depreciation.

Economic entity assumption

Use of the same accounting principles and methods from period to period by the same business enterprise.

First-in, first-out method

Inventoriable costs

Going-concern assumption

Internal control

Time period assumption

Last-in, first out method

Retail inventory method

Premises:

The methods and measures adopted within a business to safeguard its assets and enhance the accuracy and reliability of its accounting records.

The pool of costs that consist of the cost of the beginning inventory and the cost of goods purchased.

Entries at the end of an accounting period to transfer the balances of temporary accounts to permanent owner's equity accounts.

Assets such as timber, oil, coal, and mineral deposits.

A system in which detailed records are not maintained and cost of goods sold is determined only at the end of an accounting period.

Revenue, expense, and drawing accounts whose balances are transferred to owner's capital at the end of an accounting period.

An accounting principle that requires assets be recorded at their historical cost.

An inventory costing method which assumes that the latest units purchased are the first to be allocated to cost of goods sold.

All accounts appearing on the post-closing trial balance.

An assumption that requires that the activities of a company be kept separate and distinct from the activities of its owner.

Accumulated depreciation is an example of this term.

This method of accounting for uncollectible accounts is required when bad debts are significant in size.

An inventory method that records the earliest goods purchased as cost of goods sold.

A depreciation method that produces decreasing periodic depreciation by applying a constant rate to the book value of the asset.

The periodic write-off of an intangible asset.

The left side of an account.

The cost of an asset less its accumulated depreciation.

An assumption that the economic life of a business can be divided into artificial time periods.

The total amount subject to depreciation.

Use of the same accounting principles and methods from period to period by the same business enterprise.

Responses:

Additions and improvements

Natural resources

Allowance method

Amortization

Periodic inventory system

Book value

Nominal accounts

Closing entries

Comparability

Permanent accounts

Consistency

Contra asset

Historical cost principle

Debit

Declining-balance method

Depletion

Depreciable cost

Direct write-off method

Economic entity assumption

First-in, first-out method

Inventoriable costs

Going-concern assumption

Internal control

Time period assumption

Last-in, first out method

Retail inventory method

Correct Answer:

Premises:

Responses:

Additions and improvements

Natural resources

Allowance method

Amortization

Periodic inventory system

Book value

Nominal accounts

Closing entries

Comparability

Permanent accounts

Consistency

Contra asset

Historical cost principle

Debit

Declining-balance method

Depletion

Depreciable cost

Direct write-off method

Economic entity assumption

First-in, first-out method

Inventoriable costs

Going-concern assumption

Internal control

Time period assumption

Last-in, first out method

Retail inventory method