he going concern assumption is not applied to Companios that are about to file for bankruptcy Companies that have been in existence for less than a year Companies that have sustained losses for the previous two years d. The partnership form of business 16. Accounts Receivable is best described as 1. Liabilities of the company that represent the amount owed to suppliers 2. Amounts that have previously been received trom customers 3. Assets of the company representing the amount owed to them by customers 4. Amounts that have previously been paid to suppliers 17. A trial balance: a. is a list of accounts with their balances at a given time b. proves that proper account titles were used c. will not balance if a correct joumal entry is posted twice d. proves that all transactions have been recorded 18. GAAP stands for a. Grand Accounting & Able Procedures b. Generally Accepted Accounting Principles c. Good Accounting & Auditing Policies d. Governmental Accounting and Auditing Procedures 19. The "expense recognition principle" is also referred to as what principle in accounting? 20. Which of the following is not possible when recording a transaction" a. Liabilities increase and assets decrease b. Stockholders' equity increases and assets increase c. One asset increases and another asset decreases d. Stockholders' equity decrease and assets decrease May 1 Customer ordered an installation service to be done on May 15 May 2 Customer paid cash for the installation job to be done on May 15 May 8 Sooner Company purchased instalation supplies on account for the job on May 15 May 15 Sooner started and completed the installation job June 1 Sooner paid cash for the supplies that he picked up on May 8th 21. Sooner Company has the following transactons Using the above transactions, please answer the following questions with the proper date: a. If Sooner uses the cash basis of accounting when would they recognize the expense of the supplies. b. If Sooner uses the accrual basis of accounting when would they recognize the revenue from the installation Which of the following would affect the gross profit rate? (assume sales remain the same) a An increase in advertising expense b. A decrease in depreciation expense c. An increase in Cost of Goods Sold d A decrease in insurance expense 22