HW-9

In accrual-basis accounting, expenses

Accrual-basis accounting is the method of accounting that recognizes revenue when it is earned and matches expenses to the revenues they helped produce.

Which of the following statements is true of activity-based costing?

Activity-based costing is more complex and difficult to implement than the direct labor method.

Comparative balance sheets show whether a firm's net income increased or decreased with any changes in the revenues and expenses over recent years.

Comparative income statements show whether the firm's net income increased or decreased and what has happened to revenues and expenses over recent years.

The balance sheet of Rover's Inc. shows its liabilities and owners' equity as $130,000 and $170,000 respectively. In this case, Rover's _____.

In the scenario, the assets of Rover's Inc. is found out by adding its liabilities totaling $130,000 with its owners' equity totaling $170,000. The accounting equation is assets = liabilities + owners' equity.

Due to accounting scandals, many state accounting boards have imposed new ethics-related requirements.

In the wake of the scandals, many state accounting boards passed new ethics-related requirements.

Copyrights and trademarks are tangible assets.

Intangible assets are assets that have no physical existence but they still have value. Examples include patents, copyrights, trademarks, and even the goodwill a company develops with its stakeholders. FALSE

_____ are also called explicit costs.

Out-of-pocket costs (also called explicit costs) are usually easy to measure because they involve actual expenditures of money or other resources.

Which of the following refers to the claims that stockholders have against their firm's assets?

Owners' equity refers to the claims the owners or stockholders have against their firm's assets.

The Financial Accounting Standards Board comprises ten members, with each member serving a three-year term.

The Financial Accounting Standards Board (FASB) consists of seven members appointed by the Financial Accounting Foundation. Each member serves a five-year term.

The accounting equation is _____.

The accounting equation is assets = liabilities + owners' equity.