The percent change of a comparative financial statement item is computed by subtracting the analysis period amount from the base period amount, dividing the result by the base period amount and multiplying that result by 100.

Failure to record depreciation expense will overstate assets and understate expenses.

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

When an item has a value in the base period and zero in the analysis period, the decrease is 100 percent.

The higher a company’s debt ratio, the lower the risk of a company not being able to meet its obligations.

The debt ratio is calculated by dividing total assets by total liabilities.

The indirect method separately lists each major item of operating cash receipts and cash payments.

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

Dancer Co. decides to establish a petty cash fund with a beginning balance of $200. The company decides that any purchase under $25 can be processed through petty cash instead of the voucher system. The journal entry to record establishing the account is:

Dividends always decrease equity.