Accounting Final Chapter 3

If services are rendered on account, then

. stockholders' equity will increase.

Which of the following statements is not true?

.Comparability means a company uses the same accounting principles from year to year

Budke Corporation paid dividends of $5,000. As a result of this event, the

Dividends account was increased by $5,000

What organization issues U.S. accounting standards?

Financial Accounting Standards Board

The agency of the United States Government that oversees the U.S. financial markets is the

Security Exchange Commission

Generally accepted accounting principles

are accounting rules that are recognized as a general guide for financial reporting.

If expenses are paid in cash, then

assets will decrease.

If services are rendered for cash, then

assets will increase

Comstock Company provided consulting services and billed the client $2,500. As a result of this event

both assets and equity increased by $2,500.

Which accounting assumption or principle requires that only those things that can be expressed in dollar values are included in the accounting records?

monetary unit assumption.

The historical cost principle requires that when assets are acquired, they are recorded at

the amount paid to acquire them.

The going concern assumption assumes that the business

will remain in operation for the foreseeable future.

The payment of a liability

decreases assets and liabilities

An expense

decreases stockholders' equity

Collection of a $600 Accounts Receivable

increases an asset $600; decreases an asset $600

The purchase of an asset on credit

increases assets and liabilities

A revenue generally

increases assets and stockholders' equity

Relevant accounting information

is information that is capable of making a difference in a business decision.

An item is considered material if

its size is likely to influence the decision of an investor or creditor

A company using the same accounting principles from year to year is an application of

consistency.