Describe the major constraint inherent in the presentation of accounting information.
Accounting information is subject to the cost constraint. Information is not worth providing unless the benefits exceed the costs of preparing it
Give an example of a transaction that results in:
(a) A decrease in an asset and a decrease in a liability.
(b) A decrease in one asset and an increase in another asset.
(c) A decrease in one liability and an increase in another liability.
Examples are:
(a) Payment of an accounts payable.
(b) Collection of an accounts receivable from a customer.
(c) Conversion of an accounts payable to a note payable.
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