A contingent liability must be recorded if it is reasonably possible and the amount can
be reasonably estimated.
____________________ is the name given to revenue, expense, and dividend accounts
because they are closed at the end of the period.
An accounting transaction may impact only one financial statement or multiple
statements.
The ____________________ principle requires that expenses be recorded and reported
in the same period as the revenue that it helped to generate.
Refer to Baloon-E-Tunes. Prepare the current liabilities section of the balance sheet at
December 31, 2013. You may omit the heading. If the amount of current liabilities were
larger, what effect would this have on the current ratio?
A ____________________ results when cash is paid before the related amount is
reported on the income statement.
Contingent liabilities must be recorded in the accounting records if they are probable
and the amount can be reasonably estimated.
Significant noncash transactions are notreported on the statement of cash flows, but in a
separate schedule shown either at the bottom of the statement of cash flows or in a note
to the financial statements.
Time series analysis compares a company’s financial data with industry averages.
Research and Development costs should be added to the cost of patents.