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True Or False 2

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Accounting
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ARSD India
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Surname 1 Student’s name Institution Date PART A - True / False. Clearly write the word True or False in the spaces provided (1/2 point each). ____True__ 1. The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises. ____True___2. The accounting Equation can be stated as Assets = Liabilities + Stockholders Equity. ____True___3. Debits increase asset accounts and decrease liability accounts. ___False____4. Debits increase revenue accounts and decrease expense accounts. ___False____5. Revenue represents outflows of resources resulting from providing goods or services to customers. ___True____6. Earnings management is manipulation of earnings and includes channel stuffing and engaging in big bath accounting. ____True___7. Impairment of an asset is when the Book Value of an asset is less than its fair value. ___True____8. The closing process brings all temporary accounts to a zero balance and updates the balance in the retained earnings account. ___False___ 9. The income statement shows the activity over a period of time while the balance sheet reports a company's financial position at a point in time. Surname 2 ____False__ 10. A company earns a return on borrowed funds that exceeds the cost of borrowing the funds. This is referred to as negative financial leverage. ____True__ 11. Auditors play an important role in the resource allocation process by adding credibility to the financial statements. ____T ...
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