Answer the questions True/False:
1-The statement of financial position is another name for the income statement
2- The income statement only statement dated as of a point in time.
3- Assets and liabilities come into existence at different times and are not affected the same way by inflation and specific price level changes.
4- For the purposes of the balance sheet preparation, there are several different measurement bases are used (historical cost, depreciated historical cost, market value, realizable value, present value) which compromises the comparability characteristic of accounting information.
5- The present value of a future cash flow is its discounted value and it is the primary measurement basis for long term investments.
6- Current asset (CA): an asset expected to be realized in cash or to be consumed or sold during the normal operating cycle, or within one year of the balance sheet date, whichever is shorter.
7- Gains represent increases in net assets or settlements of liabilities by providing goods and services.
8- Expenses represent decreases in net assets or incurred liabilities through the provision of goods or services.
9- The requirement to disclose comprehensive income affects the computation of net income.
10- Statement of Cash Flows is required for all business enterprises which report both financial position (Balance Sheet) and results of operations (Income Statement) for a period.
11- Accounts Receivables includes customer or noncustomer transactions with interest component.
12- Trade Discounts can be accounted under the gross and net method:
13- Trade Discounts are created as an inducement for prompt payment from the customers:
14- Under the gross method of accounting for the cash discounts, if the customer pays within the discount period, a sales discount is recognized (contra revenue account):
15- Under the net method of accounting for the cash discounts, if the customer pays within the discount period, a sales discount is recognized (contra revenue account)
16- Under the net method of accounting for the cash discounts, if the customer does not pay within the discount period, a sales discount forfeit is recognized (revenue account):
17- Under the allowance method, we can estimate the uncollectable accounts receivable using either the 1) Percentage-of-Sales Approach and/or 2) Percentage-of-Receivables Approach:
18- Property, plant, and equipment includes only depreciable assets such buildings, and equipment.
19- Property, plant and equipment is to be “used in operations” and for resale.
20- Land could include additional land improvements that have an indefinite life
21- Cost of buildings could include professional fees and building permits
22- Cost of equipment does not include costs of conducting trial runs.