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Which of the following statements is NOT true regarding accrual accounting?

Select one:

a. Revenue and Expenses are recorded only when cash is collected or paid.

b. Expenses are recorded when they are incurred.

c. Revenue is recorded in the period when it is earned.

d. Accrual Accounting is required by GAAP.

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ABC Company issued $100,000 face value of bonds on January 1, 2014. The bonds had a 5 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, 2014. The bonds were issued at 96. (Use straight-line amortization for the bond discount or premium.)

Determine the amount of interest expense reported on the 2014 income statement.

Select one:

a. $5,400

b. $5,000

c. $4,600

d. None of the above

Question 8

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ABC Company issued $100,000 face value of bonds on January 1, 2014. The bonds had a 5 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, 2014. The bonds were issued at 96. (Use straight-line amortization for the bond discount or premium.)

Determine the carrying value of the bond liability as of December 31, 2014.

Select one:

a. $100,000

b. $96,400

c. $96,000

d. None of the above.

Question 9

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Below is a look at a company's trial balance at the end of an accounting period:

Debit Credit Cash 15,000 Land 37,500 Notes Payable 15,750 Common Stock 7,500 Retained Earnings 22,500 Service Revenue 52,500 Expenses 38,250 Dividends 7,500 Total 98,250 98,250 After closing entries, what is the ending balance in Retained Earnings?

Select one:

a. $38,250

b. $29,250

c. $15,750

d. $22,500

Question 10

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The left side of a T-account is known as the:

Select one:

a. Assets Side

b. Claims Side

c. Debit Side

d. Credit Side