The orale ( True False) 1 Expenses are the cost of operating a business that are paid for in the period covered by the instant 2 revenues are not growing faster than expenses, then net income will decrease A Dividing up the continuing life of a company into shorter periods is called the time period sumption 4 3 Deferred Revenue is reported on the balance sheet as a liability. A A company does not need to record the receipt of a bill for utilities used during this year if the company will not pay the bill until next year. 6 Ir the total of debits equals the total of credits on the trial balance, the accounting records may still contain errors. In general, the lower a company's net profit margin, the better the performance of the company 7 8 When accrual basis accounting is used, net income equals the amount of cash generated by the business Net income is based on estimates. 5 9 10 If a company decides to record an expenditure made this period as an expense, when it should have been recorded as an asset, net income will be overstated in the current period as a result. Adina Chaine (Choose one best answer)