1.Changes in accounting principles result in restatement of prior periods financial statements and an adjustment to the beginning balance of retained earnings. True False

2.Unusual gains and losses are items on the income statement that

A.include write down of inventories and write off of bad debts. B.are not typical of everyday activities or do not occur frequently. C.are not usually disclosed separately. D.are typical of everyday activities but do not occur frequently.

3.Changes in accounting principles result in restatement of prior periods financial statements and an adjustment to the beginning balance of retained earnings.

True False

4.On October 31, 2020, Kiwi Inc. lent $63,000 to Plum Inc. in return for a three-month, 4% interest-bearing note. What adjusting entry should Kiwi Inc. make on December 31, 2020, in connection with this note?

A.Debit Cash and credit Interest Revenue, $420. B.Debit Interest Receivable and credit Interest Revenue, $630. C.Debit Interest Revenue and credit Interest Receivable, $210 D.Debit Interest Receivable and credit Interest Revenue, $420.