The Use of Estimates and Revision of Estimates Are Uncommon

question 34

True/False

The use of estimates and Revision of Estimates are uncommon in financial reporting.

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Definitions:

Debits

Entries on the left-hand side of an account that represent the increase in assets or expenses or a decrease in liabilities, equity, or income.

Credits

Accounting entries that increase liabilities or equity accounts, or decrease asset or expense accounts, recorded on the right side of a ledger.

Accounts

Records that summarize and classify all financial transactions of a business, including assets, liabilities, equity, revenue, and expenses.

Debt Ratio

A ratio indicating a company’s leverage by comparing its total debt to its total assets.