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On the income statement, freight-in is treated as an operating expense.
In a liquidation, one partner may have to make up the deficit in another partner's
account.
One argument in favor of accelerated depreciation is that the asset's benefit is greater in
the earlier years.
The sales mix analysis that uses incremental analysis to identify the relevant costs and
revenues, consists of two steps.
Cost-volume-profit analysis is not appropriate for service businesses, as they do not
have any direct manufacturing costs.
Only the lowest levels of management can be evaluated using budgets.
Each partner is personally liable only for his/her share of the debts of the partnership.
Accounting ratios are useful as management performance measures.
A bond discount is a component of interest cost because it represents the amount in
excess of the issue price that a corporation must pay on the maturity date.
Manufacturing costs incurred in an accounting period cannot be included in the cost of
goods sold for the subsequent accounting period.
Liabilities generally arise from expected future transactions.
How effective a performance management and evaluation system is depends on how
well the goals of individual responsibility centers, the entire company, and managers are
coordinated.
Owner's equity equals cumulative net income or loss plus owner investments minus
cumulative withdrawals.
A corporation is an economic unit that is legally separate from its owners.
Equivalent units are defined as the number of units completed and sold during the
current period.
To minimize costs, managers continuously seek to improve processes and activities.
The Allowance to Adjust Long-Term Investments to Market and the Unrealized Loss on
Long-Term Investments are reciprocal accounts, each with the same dollar balance.
