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Closing entries can be prepared by referring solely to the Income Statement columns of
the work sheet.
When customers pay with bank credit cards, cash sales are considered to have taken
place.
Net income can be used to assess a company's progress in meeting the goal of
profitability.
Unrealized gains and losses on trading securities appear on the income statement.
Free cash flow is measured in terms of dollars.
The principal of a non-interest-bearing note includes an implied interest cost.
The lower the current ratio, the more likely the company will be able to meet its
liabilities.
Opportunity costs are ignored for decision making.
A corporation probably does not know who owns its registered bonds.
The specific identification method is well suited for a discount department store.
Unless there is evidence to the contrary, an investor owning 35 percent of the stock of
an investee is assumed to have significant influence.
Comparing 'what did happen' with 'what should have happened' aids in the performance
evaluation of a company.
Days' sales uncollected cannot be calculated without first knowing the receivables
turnover.
Reversing entries are all dated as of the first day of the new accounting period.
Internal control involves, in part, the protection of a company's assets.
Special order decisions are the decisions about whether to accept or reject special orders
at prices below the normal market prices.
Per the Sarbanes-Oxley Act of 2002, public corporations must establish a compensation
committee to determine how its top executives will be compensated.
The adjusting entries involving Rent Receivable and Salaries Payable could be
reversed.
An organization's four basic stakeholder groups include investors, employees, internal
business processes, and customers.
Fixed costs are often irrelevant in make-or-buy decisions.
