7 of 45 View Policies Current Attempt in Progress For Pear Limited, events and transactions during 2018-2020 included the following. The tax rate for all items is 30%. 1. Depreciation for 2019 was found to be understated by $30,000. 2. A 2020 strike by the employees of a supplier resulted in a loss of $20,000. 3. The inventory at December 31, 2018 was overstated by $40,000. 4. A 2020 flood destroyed a building that had a book value of $400,000. Floods are very uncommon in that area. The effect of these events and transactions on the balance of retained earnings at January 1, 2020 would be $343,000. $294,000. O $21,000. O $14,000. -/1 E Q ACCT 205 - Final Exam Fall 2020 Question 6 of 45 View Policies Current Attempt in Progress -/1 E For purposes of discontinued operations, the key elements in determining that a separate segment exists are that the component is O a separate business and generates its own cash flow. O in a separate geographic region and can be sold. O a separate business and a separate legal entity. O a separate legal entity and generates its own net cash flows. 5- Final Exam Fall 2020 Question 5 of 45 View Policies Current Attempt in Progress The exercise of professional judgement does NOT involve O the use of ethical decision making. O the use of knowledge gained through education. O the application of knowledge gained through experience. O aggressive accounting. Save for Later Question 4 of 45 View Policies Current Attempt in Progress -/1 E You want to improve the qualitative characteristics of your firm's financial statements. Which of the following options would most likely improve the timeliness of your company's financial statements? Increasing the frequency of statements from annually to quarterly. O Decreasing the useful life of property, plant, and equipment from ten years to five. O Increasing the number of disclosures. O Changing the timing of when revenues are recognized. View Policies Current Attempt in Progress Use of an allowance for doubtful accounts is an application of the O revenue recognition principle. O full disclosure principle. O historical cost principle. O matching principle. Save for Later