B.Multiple Choice 1. Assumption of Time Period states: a. Companies must wait until the calendar year is over to compile financial statements b. Companies use the fiscal year to report financial information c. The economic life of the company is divided into artificial time periods d. Companies record transactions in the period in which they occur 2. The Flower Shop "Beautiful" on July 30th, earned $3,000 in sales. On August 5th the bill was sent to the customer, and on August 10th received a check from the customer. Based on the revenue recognition principle, on what date sales of $3,000 above, has it been recognized? a. August 5th. b. August 10 3. Accumulated depreciation account c. July 30 d. August 1 a. is a contra-liability account. b. increases on the debit side. c. is offset against total assets on the statement of financial position. d. has a normal credit balance. 4. Speedy Clean, a laundry service company, on June 2 purchased Supplies for 6,500, and recorded Supplies as Assets. At the end of the month, June 30th, it is known from a physical count, Supplies on hand, worth 1,500. The adjustment journal that must be made by the company on June 30, is: (Supplies: Assets whose physical assets have been used up) a. Laundry Supplies Expense debit, 1,500; Credit Laundry Supplies, 1,500. b. Debit Laundry Supplies, 1,500: Credit Laundry Supplies Expense, 1,500. c. Debit Laundry Supplies, 5,000; Credit Laundry Supplies Expense, 5,000. d. Debit Laundry Supplies Expense, 5,000; Credit Laundry Supplies, 5,000. 5. Adjusted trial balance is made.... a. after the preparation of the Financial Statements b. before Trial Balance. c. to prove the similarity of total assets and total liabilities. d. after the adjustment journal and posting it