2. On April 25, Gregg Repair Service extended an offer of $115,000 for land that had been priced for sale at $140,000. On May 3, Gregg Repair Service accepted the sellers counteroffer of $127,000. On June 20, the land was assessed at a value of $88,000 for property tax purposes. On August 4, Gregg Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in Gregg Repair Services records? a. $115,000 b. $88,000 c. $140,000 d. $127,000 3. Which of the following are guidelines for behaving ethically? I. Identify the consequences of a decision and its effect on others. II. Consider your obligations and responsibilities to those affected by the decision. III. Identify your decision based on personal standards of honesty and fairness. a. I and II. b. II and III. c. I and III. d. I, II, and III. 4. The initials GAAP stand for a. General Accounting Procedures b. Generally Accepted Plans c. Generally Accepted Accounting Principles d. Generally Accepted Accounting Practices 5 . For accounting purposes, the business entity should be considered separate from its owners if the entity is a. a corporation b. a proprietorship c. a partnership d. all of the above 6. Which of the following concepts relates to separating the reporting of business and personal economic transactions? a. Cost Concept b. Unit of Measure Concept c. Business Entity Concept d. Objectivity Concept 7. A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

a. increase one asset, decrease another asset b. decrease an asset, decrease a liability Debit 'Accounts Payable' (decreases a liability)Credit 'Cash' $6,000 (decreases an asset) c. increase an asset, increase a liability d. increase an asset, increase owner's equity 8. Accounts are classified in the ledger a. chronologically b. alphabetically c. in accordance with their appearance in the financial statements d. so that accounts used most often are listed first 9. Revenue should be recognized when a. cash is received b. the service is performed c. the customer places an order d. the customer charges an order 10. Which of the following entries records the payment of an account payable? a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Supplies Expense d. debit Accounts Payable; credit Cash 11. Which of the following entries records the acquisition of office supplies on account? a. Office Supplies, debit; Cash, credit b. Cash, debit; Office Supplies, credit c. Office Supplies, debit; Accounts Payable, credit d. Accounts Receivable, debit; Office Supplies, credit 12. Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service. a. Prepaid Rent, debit; Rent Revenue, credit. b. Cash, debit; Unearned Rent, credit. c. Cash, debit; Prepaid Rent, credit. d. Cash, debit; Rent Expense credit.