True / False

Assets must always equal liabilities plus shareholders equity.

Assets are listed on the balance sheet in order of liquidity and liabilities are listed in order of maturity.

According to the revenue recognition principle, companies are required to record revenue when cash is received as this provides the most objective evidence for the auditors.

A current ratio (CA / CL) greater than 1.0 is generally desirable for a company.

According to GAAP revenue recognition criteria, in order for revenue to be recognized on the income statement, it must be earned and realized (realizable).

Revenues from discontinued operations of a company are reported separately from revenues from continuing operations in the income statement.

In order to report accounts receivable, net, companies estimate the amount they do not expect to collect from their credit customers.

Overestimating the allowance for uncollectible accounts receivable can shift income from the current period into one or more future periods

A bond selling for an amount below face value is said to be selling at a discount.

Account Payable is a liability on the balance sheet.

A company is worse off by paying cash dividends because it must record a loss for this transaction in its income statement.

A primary goal of managerial accounting is to provide information to investment managers who analyze a companys stock for external investors.

The usual financial statement projection process is completed in the following order: balance sheet, income statement, statement of cash flows.

Contribution margin is the difference between total revenue and total variable costs.

The depreciation cost for a manufacturing building is an example of a committed fixed cost

Sunk costs are the result of past decisions; therefore, they are always relevant to future decisions.

When goods are transferred from the factory to the finished goods warehouse, Work-In-Process is reduced and Cost of Goods Sold Expense is recorded.

If a company reports retained earnings of $175.3 million on its balance sheet, it must also report $175.3 million in cash.

According to the revenue recognition principle, companies are required to record revenue when cash is received as this provides the most objective evidence for the auditors.

In general, in a period of falling prices, LIFO produces higher gross profits than FIFO.