QUESTION 26

1. The periodicity assumption is required because

   		inflation exists.
   		the dollar is the monetary unit of the United States.
   		we should choose the accounting method least likely to overstate assets or income, or understate liabilities.
   		users demand information about the entity on a regular basis.

2.5 points

QUESTION 27

1. Here are some items that appear on an income statement. Operating expenses $2,300 Income taxes $650 Net other (other revenues and gains netted against other expenses and losses) $800 If the gross profit was $3,000, how much is net income on a multi-step income statement?

   		$850
   		$50
   		$2,350
   		$(750)

2.5 points

QUESTION 28

1. Entity A reported the following items on its balance sheet at the end of the current year. All accounts are listed. Cash $45,000 Accounts payable 80,000 Property, plant & equipment 200,000 Long-term debt 60,000 Common stock 150,000 Accounts receivable 90,000 Retained earnings ? Inventory 75,000 What amount will Entity A report on its balance sheet for Total Assets?

   		$560,000
   		$320,000
   		$410,000
   		$500,000