____ 26. The objectivity principle requires that

a.	business transactions must be consistent with the objectives of the entity
b.	the Financial Accounting Standards Board must be fair and unbiased in its deliberations over new accounting standards
c.	accounting principles must meet the objectives of the Security and Exchange Commission
d.	amounts recorded in the financial statements must be based on independently verifiable evidence

____ 27. A credit balance in which of the following accounts would indicate a likely error?

a.	Fees Earned
b.	Salary Expense
c.	Madison Riley, Capital
d.	Accounts Payable

____ 28. The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)

a.	capital
b.	asset
c.	contra asset
d.	liability

____ 29. 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

____ 30. The accounting equation may be expressed as

a.	Assets = Equities - Liabilities
b.	Assets + Liabilities = Owner's Equity
c.	Assets = Revenues less Liabilities
d.	Assets - Liabilities = Owner's Equity

____ 31. A patient has a physical examination and asks the bookkeeper to mail the bill. The bookkeeper should

a.	make no entry until the cash is received
b.	Cash, debit; Accounts Receivable, credit
c.	Cash, debit; Fees Earned, credit
d.	Accounts Receivable, debit; Fees Earned, credit

____ 32. Accrued revenue has

a.	been earned and cash received
b.	been earned and not recorded as revenue
c.	not been earned but recorded as revenue
d.	not been recorded as revenue but cash has been received

____ 33. How does paying a liability in cash affect the accounting equation?

a.	assets increase; liabilities decrease
b.	assets increase; liabilities increase
c.	assets decrease; liabilities decrease
d.	liabilities decrease; owner's equity increases

____ 34. The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed

a.	historical cost
b.	contra asset
c.	book value
d.	market value

____ 35. Deferred expenses have

a.	not yet been recorded as expenses or paid
b.	been recorded as expenses and paid
c.	been incurred and paid
d.	not yet been recorded as expenses