If a Fixed Asset, Such as a Computer, Were Purchased $\begin{array} { l l l } \text { Depreciation Expense } & 100 \\\text { Accumulated Depreciation } & & 100\end{array}$

question 117

Multiple Choice

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is

• A)
• \(\begin{array} { l l l }
• \text { Depreciation Expense } & 100 \\
• \text { Accumulated Depreciation } & & 100
• \end{array}\)
• B)
• \(\begin{array} { l l l }
• \text { Depreciation Expense }& 1,200 \\
• \text { Accumulated Depreciation }& 1,200
• \end{array}\)
• C)
• Accumulated Depreciation \(\quad 1,200\)
• Depreciation Expense \(\quad 1,200\)
• D)
• \(\begin{array}{lll}
• \text { Accumulated Depreciation }& 100 \\
• \text { Depreciation Expense }& 100
• \end{array}\)

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Definitions:

Accounts Receivable Turnover Ratio

A financial metric indicating how effectively a company collects its receivables or money owed by customers.

Average Days Sales

A metric that estimates the average time it takes for a company to collect cash from its customers after a sale has been made, often used in analyzing a company's liquidity and operational efficiency.

Receivables

Amounts of money owed to a company by its customers or clients for goods or services provided on credit.

Bad Debt Expense Adjustment

An accounting entry to estimate and record the amount of accounts receivable that is not expected to be collected.