The measurement principle prescribes that accounting information is based on subjective opinion rather than cost.
Answer the following statement true (T) or false (F)
False
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Which of the following terms characterizes the time period between the investment of cash in merchandise and the collection of cash from the sale of that merchandise?
a. Operating cycle b. Natural business year c. Accounting period d. Fiscal period
The iron curtain method for assessing materiality focuses on assuring that the year-end balance sheet is correct and considers the impact of prior-year uncorrected misstatements reversing in later years
a. True b. False Indicate whether the statement is true or false
Under the discount method for calculating monthly payments on a consumer loan,
A) the lender deducts the interest to be paid on the loan from the credit extended you at the beginning of the loan. B) you deduct the down payment on the sale from the final monthly payment. C) the lender reduces the monthly payments by the sale price reduction. D) you reduce the amount owed by interest income from an escrow account.
Bill starts a retirement fund at age 21 and plans on depositing equal annual amounts on each birthday, starting
at age 21, and ending at age 60. He wants to have $2 million at age 60. John starts his fund on his 30th birthday. He wants to deposit equal annual amounts on each birthday starting on his 30th birthday and ending on his 60th birthday. John wants to have $2 million at age 60. If the investment funds earn 10% per year, calculate the amounts the Bill and John respectively will have to save each year (rounded to the nearest dollar) to meet their goals. Comment on the difference.