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Static budgets are prepared on quarterly basis and require frequent change during the
annual budget period.
The quick ratio and the current ratio are measures of short-term debt-paying ability.
In a job order costing system, when the goods are sold, the Cost of Goods Sold account
is increased, and the Finished Goods Inventory account is decreased for the selling
price of the goods sold.
The carrying value of the old asset in a machine replacement decision is relevant.
The selling and administrative expense budget is typically separated into variable and
fixed cost components.
The balance sheet is also known as the statement of financial position.
Management has considerable latitude in making judgments and estimates regarding
portions of an asset's cost to expense and to retain on the balance sheet.
Operating budgets are plans used in daily operations.
Activity-based management is an extension of activity-based costing.
The long-term plan or budget involves every part of the enterprise and is much more
detailed than the short-term plan.
When preparing a statement of cash flows using the indirect method, an increase in
accounts payable is added to net income.
