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1) The increase side of all accounts is the normal balance.
2) Manufacturers use labor, plant, and equipment to convert direct materials into
finished products.
3) The amortization of a premium on bonds payable decreases bond interest expense.
4) One reason not to depend solely on historical records to set standards is that there
may be inefficiencies contained in past costs.
5) A perpetual inventory system is an effective means of control over inventory.
6) Dissolution is the term which solely means to liquidate the partnership.
7) The corporation owning all or a majority of the voting stock of another corporation is
known as the parent company.
8) The customers ledger and the creditors ledger refer to subsidiary ledgers.
9) The fixed cost per unit varies with changes in the level of activity.
10) Flexible budgeting requires all levels of management to start from zero and estimate
sales, production, and other operating data as though operations were being started for
the first time.
11) Once a static budget has been determined, it is changed regularly as the underlying
activity changes.
12) Variable costs are costs that remain constant on a per-unit basis as the level of
activity changes.
13) The sales budget is derived from the production budget.
14) The payroll register is a multicolumn form used to assemble the data related for all
employees.
15) The owners rights to the assets rank ahead of the creditors' rights to the assets.
