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9. If a company purchased a building with a cash down payment and the balance with a loan, the accounting equation will show an) a

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9. If a company purchased a building with a cash down payment and the balance with a loan, the accounting equation will show an) a Decrease in assets and increase in liabilities b. Increase in assets and increase in liabilities c. Increase in assets and decrease in liabilities d. Decrease in assets and decrease in liabilities 10. Under accrual-basis accounting a cash must be received before revenue is recognized. b. net income is calculated by matching cash outflows against cash inflows. c. events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. d the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. 11. The transactions carried out by Blue Waters Corporation during the year caused an increase in total assets of $25,650 and a decrease in total liabilities of $12,250. If no additional stock was issued during the year and dividends of $7,850 were paid, what was the net income for the year? $53,600 b$45.750 c. $29,100 d. $13,400 a. a. c. 12. Garcia Company has received advance payment for services yet to be performed. This prepayment is an example of an) Accrued expense b. Accrued revenue c. Prepaid expense d. Uneamed revenue 13. The failure to adjust a prepaid expense that has partially expired and was originally recorded by debiting a prepaid expense for the entire amount will usually result in an a Understatement of assets and an understatement of expenses b. Overstatement of assets and an overstatement of expenses Understatement of assets and an overstatement of expenses d. Overstatement of assets and an understatement of expenses 14. Which of the following accounts is NOT a temporary account? a. Rent Expense b. Dividends c. Prepaid Expense d Income Tax After the closing entries are prepared and posted: All asset accounts will have a zero balance. b. The Retained Earnings account will have the correct ending balance. The temporary accounts will have debit balances. d. All liability accounts will have a zero balance. a. c

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