Help you in reviewing accounting chapter summary

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Chapter 10 question and answers
1- What is a plant Asset ?
Ans- Plant Asset are resources that have three characteris 1.
Physical substance( definite size and shape ). 2. Used for
operation of the business. 3. Not intended for sale to customers
2- What are includes cost of land ?
And- The cost of land includes (1) the cash purchase price, (2)
closing costs such as title and attorney’s fees, (3) real estate
brokers’ commissions, and (4) accrued property taxes and other
liens assumed by the purchaser.
3- What are land improvements ?
Ans- Land improvements are structural additions made to land.
Examples are driveways, parking lots, fences, landscaping, and
underground sprinklers.
4- What are buildings ?
Ans- Buildings are facilities used in operations, such as stores,
offices, factories, warehouses, and airplane hangars.
5- What’s deprecation ?
Ans- depreciation is the process of allocating to expense
the cost of a plant asset over its useful (service) life in a rational
and systematic manner.
6- What are 3 methods of depreciation ?
Ans- 1. Straight-line2. Units-of-activity3. Declining-balance
7- A) Amortization is to intangibles B) what depreciation is to plant
assets C) depletion is to natural resources.
8- What’s a description ?
Ans- The allocation of the cost of natural resources in a rational
and systematic manner over the resource’s useful life is called
depletion.
9- What’s Amortization ?
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Ans- Amortization The allocation of the cost of an intangible
asset to expense over its useful life in a systematic and
rational manner.
10- What are intangible assets ?
Ans- Intangible assets are rights, privileges, and competitive
advantages that result —
—from the ownership of long-lived assets that do not possess
physical substance.
11- What's a patent ?
Ans- A patent is an exclusive right issued by the U.S. Patent
Office that enables the
recipient to manufacture, sell, or otherwise control an invention for
a period of 20 years from the date of the grant.
Chapter 11 Questions & Answers
1- What Is Current Liability?
Ans- current liability is a debt that a company expects
to pay within one year or the operating cycle, whichever is longer.
2- What’s Notes Payable?
Ans- Companies record obligations in the form of written notes as
notes payable.
3- What’s contingent liability?
Ans- Contingent liability is Potential liability that may become an
actual liability in the future.
4- What’s Liquidity?
Ans- Liquidity refers to the ability to pay maturing obligations and
meet unexpected needs for cash.
5- What’s Working Capital ?
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And- The excess of current assets over current liabilities is
working capital.
6- What’s Current ratio ?
Ans- current ratio permits us to compare the liquidity of
different-sized companies and of a single company at different
times.
7- What’s Gross Earning ?
Ans- Gross earnings is the total compensation earned by an
employee.
8- What’s Netpay ?
Ans- Net pay is Gross earnings less payroll deductions.
9- What’s is Salary ?
Ans- Salary is Employee pay based on a specifi ed amount
rather than an hourly rate.
10- What are Employee earnings record ?
Ans- Employee earnings record are A cumulative record of
each employee’s gross earnings, deductions, and net
pay during the year.
Summery of Chapter 12
1- Admission by investment Admission of a partner by
investing assets in the partnership, causing both
partnership net assets and total capital to increase.
2- Capital deficiency A debit balance in a partner’s capital
account after allocation of gain or loss.
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3- Partnership An association of two or more persons to
carry on as co-owners of a business for profit.
4- Partnership agreement A written contract expressing
the voluntary agreement of two or more individuals in
a partnership.
5- Partnership liquidation An event that ends both the
legal and economic life of a partnership.
6- Income ratio The basis for dividing net income and net
loss in a partnership.
7- Limited liability company A form of business organization,
usually classifi ed as a partnership for tax purposes and usually
with limited life, in which partners,
who are called members, have limited liability.
8- Limited liability partnership A partnership of profes�sionals
in which partners are given limited liability and
the public is protected from malpractice by insurance
carried by the partnership.
9- No capital deficiency All partners have credit balances
after allocation of gain or loss.
10- Withdrawal by payment from partnership assets
Withdrawal of a partner in a transaction involving the
partnership, causing both partnership net assets and
total capital to decrease.
11- Partnership dissolution A change in partners due to
withdrawal or admission, which does not necessarily
terminate the business.
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Summry of Chapter 13
1- Authorized stock The amount of stock that a corporation
is authorized to sell as indicated in its charter.
2- Charter A document that is issued by the state to set
forth important terms and features regarding the
creation of a corporation.
3- Corporation A business organized as a legal entity separate
and distinct from its owners under state corporation law.
4- Organization costs Costs incurred in the formation of a
corporation.
5- Outstanding stock Capital stock that has been issued
and is being held by stockholders.
6- Paid-in capital Total amount of cash and other assets
paid in to the corporation by stockholders in exchange
for capital stock.
7- Preferred stock Capital stock that has some preferences
over common stock.
8- Treasury stock A corporation’s own stock that has been
issued and subsequently reacquired from shareholders
by the corporation but not retired.
9- Stated value The amount per share assigned by the
board of directors to no-par value stock.
10- Retained earnings Net income that the corporation
retains for future use.
11- Privately held corporation A corporation that has only
a few stockholders and whose stock is not available for
sale to the general public.
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Prepared by: Abbas Mohamud ( Gaas), Bacc 29-A

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Prepared by: Abbas Mohamud ( Gaas), Bacc 29-A