Which of the Following Statements Is Incorrect

question 55

Multiple Choice

Which of the following statements is incorrect?

• A) Permanent accounts are another name for temporary accounts.
• B) Temporary accounts carry a zero balance at the beginning of each accounting period.
• C) The Income Summary account is a temporary account.
• D) Permanent accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.
• E) Permanent accounts include assets.

Understand the concept of contra-asset accounts and how they relate to financial statements.

Comprehend and apply the Sarbanes-Oxley Act requirements related to financial reporting.

Calculate adjustments for prepaid expenses and supplies.

Describe the differences between depreciation expense and accumulated depreciation.

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Definitions:

Critical Value Approach

A method of statistical testing which involves comparing the calculated value of a test statistic to a critical value to decide whether or not to reject the null hypothesis.

Null Hypothesis

A statement used in statistics that proposes there is no significant difference or effect, serving as the default assumption to be tested against an alternative hypothesis.

Test Statistic

A statistic (a function of the data) used in statistical hypothesis testing to decide whether to reject the null hypothesis.

P-value Approach

A method in hypothesis testing that uses the p-value, the probability of obtaining test results at least as extreme as the observed, under the assumption the null hypothesis is true.