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Question 31 (1 point) The expense recognition principle is a requirement under accrual accounting to record expenses in the same period in which cash is paid, not necessarily the period as the revenues they generate. in the same period as the revenues they generate, not necessarily the period when cash is paid. only as an adjusting entry when needed. Question 32 (1 point) Which of the following is NOT an expense and would NOT show on an income statement? Paying a dividend. Paying for supplies. Paying for electricity used by production equipment. Paying wages for production workers. Question 35 (1 point) Which of the following journal entries would result in a decrease in Shareholders' Equity? Debiting Prepaid Utilities and crediting Cash. Debiting Deferred Revenue and crediting Revenue. Debiting Inventory and crediting Accounts Payable. None of the choices. Question 36 (1 point) Which of the following groups of accounts contains only those accounts that normally have credit balances? Accounts Payable; Retained Earnings: Service Revenue. Accounts Receivable: Accounts Payable; Deferred Revenue. Notes Payable; Wages Payable; Rent Expense. Equipment; Cash; Share Capital. Question 37 (1 point) Expenses a represent the costs that arise when a company sacrifices its resources during the accounting period. are reported in the period in which they are incurred to generate revenue, reduce shareholders' equity. all of the choices are correct. Question 44 (1 point) Which of the following is a true statement? Both revenue accounts and expense accounts are subsets of retained earnings. Both revenue accounts and expense accounts are subsets of share capital. Revenue accounts are a subset of cash, and expense accounts are a subset of accounts payable Revenue accounts are a subset of assets, and expense accounts are a subset of liabilities. Question 45 (1 point) If a company is paid in full for services provided to a customer during this month, how will the basic accounting equation be affected? Liabilities will decrease. Liabilities will increase Shareholders' equity will increase as revenue is recorded. Shareholders' equity will increase as expenses are recorded. Question 46 (1 point) The Don't Tread on Me Tire Company had retained earnings at December 31, 20X7 of $200,000. During 20X8, the company had revenues of $400,000 and expenses of $350,000, and the company declared and paid dividends of $11,000. Retained earnings on the balance sheet as of December 31, 20X8 will be: ending retained earnings is $289,000 ending retained earnings is $239,000 ending retained earnings is $39,000 ending retained earnings is $250,000 Question 47 (1 point) Which of the following would a company be most likely to overstate on its balance sheet if the company was trying to mislead potential external investors or creditors? 15 Accounts Receivable. Notes Payable Accounts Payable. Deferred Revenues