Ratios provide one way to compare companies in the same industry regardless of their size.

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True

False

Question 3

Under U.S. GAAP, research and development expenses must be immediately expensed and are not capitalized.

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True

False

Question 4

Question text

All else being equal, higher financial leverage will decrease a companys debt rating and increase the interest rate it must pay.

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True

False

Question 5

Companies that engage in long-term sales contracts such as construction projects often use the completed contract method to recognize revenue. This means that revenue is recognized in proportion to the projects completion

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True

False

Question 6

Question text

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

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True

False

Question 7

There is a certain order in which a company prepares its financial statements. A company should prepare its balance sheet before the income statement.

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True

False

Question 8

In 2020, Macys paid $459 million of cash dividends. These dividends reduced assets and reduced retained earnings.

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True

False

Question 9

Not yet answered

The net change in cash during a period must equal the net change in all other balance sheet accounts.

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True

False