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A stock dividend will cause a decrease in the total number of shares issued and
outstanding.
The main differences among the balance sheets of the sole proprietorship, the
partnership, and the corporation are found in the current assets and current liabilities
sections.
The point where joint products or services become separable and identifiable is known
as identifiable point.
Using the cost-adjusted-to-market method of accounting for a long-term investment in
stock, the journal entry to record the receipt of dividends involves a debit to Dividend
Income.
When a net loss occurs, the Owner's Capital account will contain a negative balance.
A continuous budget is a 12-month forward-rolling budget that summarizes budgets for
the next 12 months.
Vertical analysis will reveal the percentage of net sales consumed by salaries expense.
It is not possible for one company to influence the operating policies of another
company unless it owns more than a 50 percent interest in that company.
The liability of corporate stockholders is limited to their percentage share of ownership.
A system of internal control cannot be considered good until the possibility of human
error has been completely eliminated.
For an index number, the base year is set at 100 percent.
Because failure to record a liability generally leads to failure to record an expense, it
usually results in an overstatement of income.
A transaction should be recorded when title to merchandise passes from the supplier to
the purchaser and creates an obligation to pay.
The static budget can be adjusted automatically for changes in the level of output.
