Kevin and Sunny were studying for their mid-term exam on Financial Administration in Sport and discussing financial statements. Kevin stated, "The terminologies used in a balance sheet must be the same for all corporations so that everyone can easily know what they are." Upon hearing this, Sunny disagreed, stating, "No, I don't think so. As far as I know, it's the opposite. The terminology used may differ from one company to another." Sunny then added, "By the way, did you know that accrual basis has to be used when preparing an income statement, which is required by Generally Accepted Accounting Principles (GAAP)?" Based on the dialogue above, whose statement(s) are correct? Kevin Sunny Sunny's first statement on balance sheet is correct, but his second statement regarding income statement is not correct. Both of their statements are incorrect.

Answer rating: 100% (QA)

Based on the dialogue provided Sunnys first statement on the balance sheet is correct while his second statement regarding the income statement is not ... View the full answer