Two students are discussing the use of a trial balance. They wonder whether the following errors, each considered separately, would prevent the trial balance from balancing :

(i) The accountant debited cash for Tk. 6,000 and credited salaries and wages expenses for Tk. 6,000 for the payment of wages.
(ii) Cash collected on account was debited to cash Tk. 8,000 and service revenue was credited for Tk. 80,000.

What would you suggest them ?

Indicate whether the following statements are true or false. If false indicate how to correct the statement.

(1) The historical cost principle dictates that companies record assets at their cost. In the later periods, however, the fair value of the assets must be used, if fair value is higher than its' cost.
(2) Relevance means that financial information matches what happened; the information is factual.
(3) The revenue recognition principle states that expenses should be matched with revenues.
(4) Cash flows from operating activities is always less than or equal to the net income of an organization.
(5) In horizontal analysis, each item is expressed as a percentage of the base year's amount.