Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, a loss on the sale of an asset would be added to net income.
Answer the following statement true (T) or false (F)
True
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The depreciation of factory equipment is adjusted by
a. debiting Depreciation Expense and crediting Factory Equipment. b. debiting Factory Overhead and crediting Accumulated Depreciation-Factory Equipment. c. debiting Accumulated Depreciation-Factory Equipment and crediting Factory Overhead. d. debiting Accumulated Depreciation-Factory Equipment and crediting Depreciation Expense.
The likelihood of assessing control risk too high is the risk that the sample selected to test controls:
A. contains misstatements that could be material to the financial statements when aggregated with misstatements in other account balances or transactions classes. B. does not support the tolerable misstatement for some or all of management's assertions. C. does not support the auditor's planned assessed level of control risk when the true operating effectiveness of internal control justifies such an assessment. D. contains proportionately fewer deviations from prescribed internal controls than exist in the balance or class as a whole.
A purchase on account with an invoice price of $750 has been made. The entry to record the payment after the 2 percent discount period would include a(n)
a. decrease to Accounts Payable for $750. b. decrease to Purchases Discounts for $15. c. increase to Accounts Payable for $735. d. decrease to Cash for $735.
The following transaction has been recorded in the general journal:Interest Expense150 Interest Payable 150How will this transaction affect the company's financial statements after it is posted to the ledger accounts?
A. Decreases Stockholders' Equity B. Decreases Total Assets C. Increases Retained Earnings D. Decreases Total Liabilities