On August 1, Central Computers, Inc

question 110

Multiple Choice

On August 1, Central Computers, Inc. purchased thirty computer chips, on account, from a company located in Taiwan for 500,000 Taiwan dollars. On that date the Taiwan dollar is worth $0.040. On September 1, when the Taiwan dollar was worth $0.038, payment was made. The journal entry to record the sale on August 1 would include a:

• A) credit to Accounts Payable $19,000.
• B) credit to Accounts Payable $20,000.
• C) credit to Foreign-Currency Transaction Gain $1,000.
• D) credit to Cash $20,000.

Comprehend the allocation of costs in multi-department scenarios using relevant bases.

Understand the justification and accounting treatment for expensing R&D.

Comprehend the accounting for assets when future economic benefits do not exceed carrying value.

Recognize U.S. GAAP rules for software development costs.

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Definitions:

Ambiguous Figure

An image or drawing designed to offer more than one perceptual interpretation, often used in psychological tests to explore perception and cognitive processes.

Geons

Simple geometric figures, such as cubes, cylinders, and pyramids, that can be combined to create all other shapes. An early (and crucial) step in some models of object recognition is determining which geons are present.

Top-down Processing

A cognitive process where understanding of information starts with the broader context or knowledge before incorporating details.

Bottom-up Processing

A type of information processing based on incoming data from the environment to form a perception, starting from the details and moving up to the whole.