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If a company hires honest employees and its top management acts with integrity, no
internal control procedures will be necessary.
If the investor holds 50% or more of the common stock of the investee, then the two
corporations are no longer separate accounting entities and therefore must prepare
____________________ financial statements, which combine information about the
two corporations as if they were a single company.
Money market accounts with original maturities of less than 90 days are cash
equivalents.
An informal schedule called a ________________ is helpful for organizing and
preparing the information necessary to perform the end-of-period steps in the
accounting cycle.
An example of a current liability is a note payable that is due in 2 years.
When cash is paid before an expense is incurred, an accrual is necessary.
If the beginning balance in Accounts Receivable is $11,000 and the ending balance is
$9,000, then credit sales must have exceeded collections on account.
A contingent liability must be recorded if it is reasonably possible and the amount can
be reasonably estimated.
If a corporation has only one class of stock, this is usually it.
