If an adjustment in the operating activities section of the statement of cash flows is explained by "revenue increased faster than cash received during the year," which of the following are true? a. Accounts receivable increased during the year. b. Unearned revenue decreased during the year. c. In the operating activities section, accrual net income should be reduced (by the amount of the adjustment). d. All of these e. None of these 1. have not yet 2. Hart returned $900 of goods purchased on account and was given credit by the seller. Assuming the goods been paid for and the company uses the periodic inventory system, what entry would Hart make to rec a. Accounts Payable b. Accounts Receivable c. Accounts Payable d. Cash e. None of these Purchase Returns&Allowances Purchase Returns& Allowances Purchases Purchase Returns&Allowances 900 900 900 900 900 900 900 900 Data Corporation issued 1,000 shares of $2 par value common stock for S10 per share. The journal entry to record the issue of the common stock is: a. Cash 3. 10,000 Common Stock 10,000 b. Cash 2,000 Paid-in Capital in Excess of Par Value8,000 Common Stock Common Stock Retained Earnings Common Stock Paid-in Capital in Excess of Par Value 10,000 c. Cash 10,000 8,000 2,000 d. Cash 0,000 2,000 8,000 e. None of these 4. A piece of equipment with a cost of $11,000, a useful life of S years, and a salvage value of S1,000 is depreciated using the straight-line method. On the first day of the fourth year, the equipment is sold for S4,000. Using this information, compute a. $1,000 gain b. $3,000 loss c. $2,000 gain d. $1,000 loss e. None of these S. The gross profit (margin) for the Smith Retail Store using the following information is: . S 400 .600 1,500 80 120 Ending inventory .. .. Purchase returns & allowances Sales returns & alowances .2,800 300 a. $1,000 b. $1,100 c. $1,200 d. $1,300 e. None of these 6. During 2005, Beta had cash sales of S65,000 and credit sales of $25,000. Operating expenses were $40,000 of which $30,000 was paid in 2005. In addition, Bota purchased a piece of equipment at the beginning of the year for $21,000 cash that is expected to have a useful life of 3 years and no salvage value (straight-line depreciation). Beta's 2005 CASH BASIS (not accrual basis) net income is a. $14,000 b. $25,000 c. $35,000 d. $44,000 e. None of these 7. Using the same facts in the previous problem, Beta's 2005 ACCRUAL BASIS net income is a. $18,000 b. $29,000 c. $43,000 d. $50,000 e. None of these