An overstatement of ending inventory will cause an overstatement of assets and an understatement of stockholders' equity on the balance sheet.
Answer the following statement true (T) or false (F)
False
If ending inventory is overstated, then assets will be overstated. Cost of goods sold will be understated, so net income will be overstated and stockholders' equity will be overstated.
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A student is defending a certain depreciation method. She uses the argument that repairs and maintenance costs will probably increase as the asset gets older. She also argues that the asset will produce less as it gets older. What depreciation method is she probably defending?
A) straight-line method B) sum-of-the-years'-digits method C) sinking-fund method D) activity method
Which of the following is least likely to limit the scope of a message?
A) Overall length B) Level of detail C) Number of key points D) Range of information E) Time allowed for presentation
If a firm operates at less then full capacity then price _______________________ are not likely
Fill in the blank(s) with correct word
On July 1 of the current calendar year, Olive Co. paid $8700 cash for management services to be performed over a two-year period beginning July 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 of the current year for Olive would include:
A. A credit to a liability and a debit to a prepaid expense for $2175. B. A debit to an expense and a credit to a prepaid expense for $6525. C. A debit to a prepaid expense and a credit to an expense for $2175. D. A debit to a prepaid expense and a credit to Cash for $6525. E. A debit to an expense and a credit to a prepaid expense for $2175.