ACC 400 Course Great Wisdom / tutorialrank.com ACC 400 Course Great Wisdom / tutorialrank.com | Page 23

4. The acquisition of treasury stock by a corporation increases total
assets and total stockholders’ equity. False

5. Treasury stock is reported as an asset on the balance sheet because
treasury stock may later be resold. False

6. Horizontal analysis is a technique for evaluating a financial
statement item in the current year with other items in the current year.
False

7. Another name for horizontal analysis is trend analysis. True

8. If a company has sales of $110 in 2007 and $154 in 2006, the
percentage decrease in sales from 2006 to 2007 is 140%. False

9. Allowance for Doubtful Accounts is debited under the direct writeoff method when an account is determined to be uncollectible. False

10. When the allowance method is used, the write-off of an account
receivable results in an expense at the time of write-off. False

11. Allowance for Doubtful Accounts is a contra account that is
deducted from Accounts Receivable on the balance sheet. True