The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Depreciation expense for a period is the portion of a plant asset’s cost that is allocated to that period.

A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity.

Which of the following is classified as a current asset?

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is added to net income.

Closing entries are necessary so that retained earnings will begin each period with a zero balance.

The numbering system used in a company’s chart of accounts:

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is added to net income.

General-purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of stockholders’ equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements.