1) Which of the following statements is correct?

A)	Under the accrual basis of accounting, expenses are recorded in the period in which they are paid.

B)	Under the accrual basis of accounting, revenue is recorded in the period in which it is earned.

C)	Under the accrual basis of accounting, revenue is recorded in the period in which it is paid.

2) A firm reported sales of $720,000 for the year and Accounts Receivable has a balance of $40,000 at year-end. Prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $300. The firm estimated its losses from uncollectible accounts to be one-half of 1 percent of sales. The entry to record the estimated losses from uncollectible accounts will include a credit to Allowance for Doubtful Accounts for

A)

$3,900.

B)

$7,200.

C)

$3,600.

D)

$3,300.

3) At the beginning of the current year, a firm purchases an asset for $60,000 and estimates that it will have a useful life of five years and a salvage value of $5,000. Under the straight-line method, the depreciation expense for the first year of the asset's useful life is:

A)

$9,000.

B)

$20,000.

C)

$11,000.

D)

$12,000.

4) If an asset is purchased at the beginning of a year, the method of depreciation that results in the same amount of depreciation expense each year is the:

A)	sum-of-the-years'-digits method.

B)	units-of-output method.

C)	straight-line method.

D)	declining-balance method.

5) A company issued 5%, 10-year bonds with a par value of $500,000. The current market rate of interest is 5%. The journal entry to record each semiannual interest payment is:

A)

Bond Interest Expense	$	15,000
Cash			$	15,000

B)

Bond Interest Expense	$	300,000
Bond Interest Payable			$	300,000

C)

Bond Interest Expense	$	30,000
Cash			$	30,000

D)

Bond Interest Expense	$	12,500
Cash			$	12,500