T or F Question

1. The journal entry to adjust the unearned revenue account when revenues are earned results in an increase in assets and a decrease in liabilities. 2. According to the expense recognition principle, wages expense is recognized on the income statement when the wages are paid rather than when the employee provides the work. 3. Comparative financial statements are those of a company in one industry presented with another company in the same industry. 4. The year-end journal entry to record bad debt expense reduces current assets and net income. 5. During periods of decreasing unit costs, use of the LIFO inventory method will result in a higher amount of ending inventory than will the use of the FIFO inventory method. 6. Use of the double-declining-balance method of depreciation results in higher depreciation expense during the first year of an asset's life relative to use of the straight-line depreciation method. 7. Purchasing inventory on account increases the accounts payable turnover ratio. 8. The major disadvantages of issuing a bond are the risk of bankruptcy and the negative impact on cash flow because debt must be repaid at a specified date in the future