Question

1. Which of the following accounts would not be reported in the Property, Plant, and Equipment section of a balance sheet?

a.Depreciation Expense—Buildings

b.Buildings

c.Accumulated Depreciation—Buildings

d.Land

2

The data presented below are for Falconi, Inc. for 2017.

Credit sales during the year	$2,100,000
Accounts receivable—December 31, 2017	295,000
Allowance for doubtful accounts—December 31, 2017	28,000
Bad debts expense for the year	17,000

What is the effect on net accounts receivable when Falconi records its estimate for bad debts expense using the allowance method?

a.Net accounts receivable stay the same.

b.Net accounts receivable increase.

c.Net accounts receivable decrease.

d.Net accounts receivable both increase and decrease.

Answer 1

1.Only Accumulated depreciation accounts are reported in property plant and machinery equipment section of balance sheet along with land and building.

Accumulated depreciation is the amount of depreciation charged till date to the overall cost of the asset, and value of property plant and equipment is shown in the balance sheet after charging the accumulated depreciation to the asset.

So Depreciation account, which reflects the current year depreciation would not be recorded in the the balance sheet of the company.

Land and buildings are separately recorded into the balance sheet of the company.

Correct option would be option (a) depreciation expense -building

So the correct answer would be option (a).