Part 5: Multiple Choice Questions 1. According to Generally Accepted Accounting Principles (GAAP), when should a company recognize expense? a. When cash is paid. b. When cash is received. c. When resources are utilized. d. When earned. 2. Employees of DeShawn's Data Recovery earned $4,290 for hours worked in June and will be paid during the first week of July. What is the impact on the June income statement of DeShawn's Data Recovery? a. Salaries payable increases. b. Net income decreases. c. Cash decreases. d. The June income statement is not affected by this transaction. 3. During October, DeShawn's Data Recovery collected $2,000 from a customer for a sale made in June. How is this transaction captured in the October income statement of DeShawn's Data Recovery? a. Net income increases. b. Net income decreases. c. Cash decreases. d. The October income statement is not affected by this transaction. 4. During October, DeShawn's Data Recovery collected $2,000 from a customer for a sale made in June. How is this transaction captured in the October statement of cash flows? a. Cash inflow from operating activities b. Cash inflow from investing activities c. Cash inflow from financing activities d. The October statement of cash flows is not affected by this transaction. 5. Bella's Bakery borrowed $70,000 on June 30, 2021 at a 5% interest rate. They will repay the debt in 2022. How much interest expense should Bella's Bakery report in their income statement for the year ended December 31, 2021? a. O b. $3,500 c. $2,042 d. $1,750 6. Bella's Bakery pays its employees $590 for hours worked this week. How will this transaction impact the balance sheet of Bella's Bakery? a. Assets will increase. b. Liabilities will increase. c. Stockholders' equity will decrease. d. Stockholders' equity will increase. Discussion Board Question Now that you have completed the lab, respond to the revenue recognition case posted in the Week 4 Lab Discussion assignment on Canvas. You do not need to write out your response below, just respond to the discussion board post in Canvas. Remember that you must post your response and respond to at least one peer to receive full credit for the discussion board assignment. 9