True/False

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

The entry to record the payment of a cash dividend includes a debit to Retained Earnings and a credit to Cash.

When treasury stock is purchased, the Treasury Stock account is debited for the entire amount paid for the stock.

The Dividends Payable accounts appear on the balance sheet as a current liability.

The entry to record the distribution of a stock dividend includes a credit to Common Stock Dividend Distribution.

The dissolution of a partnership and the formation of a new partnership may have no noticeable effect on the continuing operations of the business.

If a new partner purchases an interest in a partnership firm directly from an existing partner, the Cash account is debited and the new partner's capital account is credited.

The entry to close a partner's drawing account at the end of a fiscal period includes a debit to the partner's drawing account.

The rate of return on total assets measures how effectively management has used the assets of the company.

Salary and interest allowances for partners are treated as expenses of the firm and are used in the determination of net income.

Amortizing bond premiums over the period from the issue date to the maturity date reduces bond interest expense shown on the income statement.

Interest on bonds must be paid in full even when the corporation operates at a loss.

The amount received in excess of the par value of preferred stock issued is recorded in an account called Paid-in Capital in Excess of Par Value-Preferred Stock.

A legal partnership does not exist unless there is a written partnership agreement.

In horizontal analysis, the base year is the most recent year.