35. The income statement is prepared from a. the adjusted trial balance b. the Income Statement columns of the end-of-period spreadsheet

c. either the adjusted trial balance or the Income Statement columns of the end-of-period spreadsheet

d. both the adjusted trial balance and the Income Statement columns of the end-of-period spreadsheet

36. Computer Corporation is starting its computer programming business and has sold stock of $15,000. Identify how the accounting equation will be affected.

a. increase in assets (Cash) and increase in liabilities (Accounts Payable)

b. increase in assets (Cash) and increase in Stockholders' Equity

c. increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable)

d. increase in assets (Cash) and increase in assets (Accounts Receivable)

37. The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting

a. records revenues when they are earned and expenses when they are paid

b. records revenues and expenses when they are incurred

c. records revenues when cash is received and expenses when they are incurred

d. records revenues and expenses when the company needs to apply for a loan

38. The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

a. prior period statement

b. retained earnings statement

c.income statement

d. balance sheet

39. Which of the following is the best description of accountings role in business? a. Accounting provides stockholders with information regarding the market value of the companys stocks.

b. Accounting provides information to managers to operate the business and to other users to make decisions regarding the economic condition of the company.

c. Accounting helps in decreasing the credit risk of the company.

d. Accounting is not responsible for providing any form of information to users. That is the role of the Information Systems Department.

40. Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

a. debit Salaries Payable, $12,000; credit Cash, $12,000

b. debit Salary Expense, $12,000; credit Dividends, $12,000

c. debit Salary Expense, $12,000; credit Salaries Payable, $12,000

d. debit Dividends, $12,000; credit Cash, $12,000