a. What term is used to describe an increase in economic benefits during the period? 1) Equity 2) Net income 3) Revenue 4) Assets b. An asset is recorded at the price paid rather than the market value. This practice is justified by which underlying assumption of the IASB Framework? 1) Relevance 2) Going-concern 3) Accrual basis accounting 4) Faithful representation c. If the liabilities of a business decreased 8,000 during a period of time and owners equity in the business increased 3,000 during the same period, the assets of the business must have increased or decreased by how much? 1) Decreased 5,000 2) Decreased 11,000 3) Increased 5,000 4) Increased 11,000 d. A purchase of office supplies on account for 220 was recorded as an addition to Office Supplies and a subtraction from Cash. By what amounts are the accounts under- or overstated as a result of this error? 1) Office Supplies, overstated 220; Liabilities, understated 440 2) Assets, understated 220; Liabilities, overstated 220 3) Assets, overstated 440; Liabilities, overstated 440 4) Assets, understated 220; Liabilities, understated 220 e. The following transactions occurred during July: A. Received 400 from a customer in partial payment of his account receivable which arose as a result of sales during June B. Rendered photography services to a customer on credit, 700 C. Received 1,600 cash from Barbara Jones, the owner of the business D. Borrowed 2,200 from the bank E. Received 800 cash for photography services provided to customer during the month F. Received 2,000 from a customer in payment for services to be performed next year What was the amount of revenue for July? 1) 800 2) 1,500 3) 5,500 4) 7,700