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$10,000 during the same period, the period's change in total owner's equity was a $200,000 increase. 0. If total assets increased by $190,000 during a

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$10,000 during the same period, the period's change in total owner's equity was a $200,000 increase. 0. If total assets increased by $190,000 during a specific period and liabilities decreased by 1. If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash, and the owner invested $10,000 in cash, the capital of the owner increased by $40,000. F 12. Paying an account payable increases liabilities and decreases assets. T 13. Assets that are used up during the process of earning revenue are called expenses. T F 14. An income statement is a summarry of the revenues and expenses of a business as of a specific date. F / 15. The balance sheet represents the accounting equation. F 16. Generally accepted accounting principles require the accrual basis of accounting. T F 17. The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting. T F / 18. The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received 19. Revenues and expenses should be recorded in the same period to which they relate. T 20. The matching principle supports matching expenses with the related revenues. F T / F 21. The updating of accounts when financial statements are prepared is called the adjusting process. T/F 22. Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts. T/F 23. An adjusting entry would adjust revenue so it is reported when earned and not when cash is received. 24. An adjusting entry would adjust F an expense account so the expense is reported when incurred. 25. Deferrals are recorded transactions that delay the recognition of an expense or revenue. 26. Unearned revenue is a liability. T 27. A company pays an on December 31, which is a Wednesday, is a debit to Wages Expense of $1,800, and a credit to Wages Payable of $1,800. employee $3,000 for a five-day workweek, Monday-Friday. The adjusting entry F 28. A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned. T T F

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