Use the following information about the current year’s operations of a company to calculate the cash paid for merchandise.           Cost of goods sold $ 226,000   Merchandise inventory, January 1   54,800   Merchandise inventory, December 31   57,400   Accounts payable, January 1   54,400   Accounts payable, December 31   59,800  

Vertical analysis is the comparison of a company’s financial condition and performance across time.

It is acceptable to record prepayment of expenses as debits to expense accounts if an adjusting entry is made at the end of the period to bring the asset account balance to the correct unused or unexpired amount.

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

A stockholder’s investment increases equity via net income.

The dollar change for a comparative financial statement item is calculated by:

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Adjusting entries are made after the preparation of financial statements.

A trial balance prepared after adjustments have been recorded is called a(n):

The revenue recognition principle: