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If any portion of a long-term debt is to be paid in the next year, that portion should be
classified as a current liability.
A petty cash fund is established for small payments for which writing a check would be
impractical.
The proposals that will produce poor returns will have a negative impact on an
organization's profitability.
If the face interest rate at the date of bond issuance exceeds the market interest rate, the
bond will probably be sold at a premium.
In accounting for inventory, the assumed cost flow need not match the physical goods
flow.
Which of the following statements isTRUE about the full-costing method?
A.The cost of a dry well would be written off immediately as a loss.
B.All costs are recorded as assets and then depleted over the resource's useful life.
C.All costs are written off immediately as a loss.
D.All costs are recorded as assets and remain on the books as assets.
The distinction between current and long-term liabilities affects the evaluation of a
company's solvency.
Backflush costing eliminates the need to make journal entries during the period to track
cost flows through the production process as the product is made.
Net present value method and accounting rate of return method are the two important
decision variables used in the evaluation of proposals.
Both indirect materials and indirect labor are overhead costs.
Cash is another term for owner's equity.
The variable overhead spending variance is also called the variable overhead rate
variance.
A limited partnership normally has one or more general partners whose liability is
unlimited.
Total manufacturing costs include all direct materials used as well as all direct labor
costs and overhead costs incurred during a period.
Service organizations use unit costs of services to determine inventory balances.
A journal entry to transfer costs from the Work in Process account to Finished Goods
Inventory account will include a debit to Finished Goods Inventory.
A decrease in the Owner's Capital account is recorded with a debit.
Costs of postretirement benefits other than pension plans should be expensed when paid
to the retired employee.
When using an index number, one sets the most recent number in a series equal to 100.
Income Summary is closed with a debit to Income Summary and a credit to the
Withdrawals account.
