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The cost of a previously purchased machine is an example of a sunk cost.
If an accrued liability for salaries is not recorded, income for the following period will
be overstated.
Interest on debt is tax-deductible to the issuing corporation, whereas dividends on stock
are not.
All product costs are expensed in the period in which they are paid in cash.
The analysis of risk and return is important to both investors and creditors.
Owner withdrawals are an example of an expense.
Sales Discounts and Sales Returns and Allowances have normal credit balances.
A material item is one that is likely to affect a user's decision.
A corporation cannot declare a dividend that would cause stockholders' equity to fall
below the legal capital.
When a company has net income, the Income Summary account appears as a credit on
the post-closing trial balance.
