according to the 16. When assets are acquired, they are required to be recorded at historical cost; cost principle C) D) market price; market price principle A) exchange price paid; lump sum principle B) appraisal value; auctioneer principle 17. The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the A) going concern assumption. B) time period assumption. C) economic entity assumption. D) monetary unit assumption. 18. A credit to a revenue account indicates a credit was made to a liability account. A) an increase in the revenue. B) an error. a decrease in the revenue. D) 19. Owner's equity is decreased by all of the following except A) expenses. B) owner's drawings. C) owner's investments. 20. What type of transaction will cause the trial balance to be out of balance? A) One account is debited and one account is credited for the same wrong amounts. B) One account is debited and one account is credited for the correct amounts. C) Two accounts are debited for the same amount, but one account should be credited. D) No entry is recorded. 21. Red Company's inventory records show the following data: Units 5,000 3,000 2,000 Unit Cost $9.00 January 1 Inventory, Purchases: 7.00 June 18 6.00 November 8 A physical inventory on December 31 shows 3,000 units on hand. Under the FIFO method, the December 31 inventory value is A) $25,000. B) S27,000. C) S21,000. D) S19,000. 22. Machinery was purchased for $500,000 and has a book value of S150,000 and a depreciable cost of $450,000. The estimated salvage value is A) $75,000. B) S25,000. C) $100,000. D) S50,000. assets and 23. An adjusting entry to record supplies expense expenses. A) decreases; increases B) decreases; decreases C) increases; increases D) increases; decreases