We record a gain if we sell an asset for less than book value.

FICA taxes are paid only by the employee.

Employee salaries are reduced by withholdings for federal and state income taxes, FICA taxes, and the employee portion of insurance and retirement contributions.

The audit report is a report that describes the auditor's opinion of the fairness of the financial statement presentations and the evidence gathered to support that opinion.

A balance sheet is used to report the activities involving assets, liabilities, and stockholders' equity over a specific time period.

The income statement is used to report the results of operations at a specific date.

The left side of a T-account is the credit side.

Debits decrease asset accounts.

Double entry accounting requires that every entry must include at least one debit and at least one credit.

When a company receives cash in advance from a customer, it should debit Cash and credit Accounts Receivable.

Inventory shrinkage refers to unrecorded decreases in inventory resulting from breakage, theft, and sales of inventory.

Sales Discounts is shown as a reduction of cost of goods sold in the income statement.

In a perpetual inventory system, Inventory and Cost of Goods Sold accounts are kept up-to-date throughout the accounting period.

A business is an accounting entity separate from its owners, regardless of whether it is a single proprietorship, a partnership ,LLC, or a corporation.

Management accountants primarily are concerned with developing information suited to the needs of decision makers within the organization.

The reason that increases in both expenses and dividends are recorded by debit entries is that both expenses and dividends reduce stockholders' equity.

On a classified balance sheet, current assets are customarily listed in the order in which they are expected to be converted into cash.

A debit balance of an asset account indicates an error.

A Corporation and an LLC form of organization provide personal liability protection.

The basic purpose of accounting is to provide financial information about an economic entity.

CPA's perform audits to determine the fairness and reliability of a company's financial statements.

Management accountants primarily are concerned with developing information to be used by external users.

Financial accounting provides information for people inside the company while managerial accounting focuses on information for people outside the company.

Adjusting entries are not normally needed in order to prepare accurate financial statements.

The higher the debt ratio, the smaller the risk of a company not being able to meet its obligations.