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In calculating the depletion of a natural resource, its useful life in years is irrelevant.
Taking a physical inventory refers to making a count of all merchandise on hand at a
particular time.
Cost-volume-profit analysis assumes costs and revenues have a close linear
approximation.
If the actual overhead costs are more than applied overhead costs, the difference
represents overapplied overhead costs.
Natural resources are classified as intangible assets on the balance sheet.
Exchange rates for currency change daily according to the supply and demand for each
currency.
The proposed purchase price of an asset should be compared to the present value of the
benefits it will generate over its useful life.
A just-in-time operating environment requires maintenance of large material and
finished goods inventories in order to meet customer demand for products.
The first step in the accounting cycle is to post the journal entries to the ledger and
prepare a trial balance.
Dividends in arrears on cumulative preferred stock are not paid until after dividends are
paid on common stock.
An advantage of accounting information is that it provides exact and completely
reliable measures.
Salaries of supervisory production personnel should be classified as direct labor costs.
The point at which the total cost line intersects with the total revenue line is the
breakeven point.
Backflush costing eliminates the use of a Work in process account.
Costs for individual jobs are maintained on material cost cards when job order costing
is in use.
Book value is another term for carrying value.
The Withdrawals account bypasses the Income Summary account when it is being
closed.
All variable costs except manufacturing costs are subtracted from sales to determine the
total contribution margin.
The alternative with the lowest payback period is the most desirable.
