Review Quiz Instructions: Choose the most appropriate answer for the following questions. 1. What term is used to represent a difference between the budgeted amount and the actual amount of a line item that is expected to reverse itself during a subsequent period? a. b. C. d. 2. A permanent variance A fixed cost A temporary variance A flexible cost What basic accounting principle requires that helpful explanations accompany financial reports, when necessary? a. Disclosure b. Reliability 3. ends 4. C. d. Matching Consistency Trinity Hospital has a fiscal year end of August 31. For this hospital, the second quarter a. November 30th b. C. d. February 28th or 29th May 31st August 31st Dr. Blake's administrative assistant purchased office supplies at an office supplies store and charged the purchase to the doctor's account. The journal entry used to record this transaction is: a. Debit office supplies; credit accounts receivable Debit accounts payable; credit office supplies expense b. C. d. Debit office supplies expense; credit accounts payable Debit accounts receivable; credit revenue Instructions: Use the following information to answer questions 5 through 9. The following information was abstracted from Community Hospital's balance sheet. Total assets: Current assets: Total liabilities: $25,000,000 $4,000,000 $10,000,000 Current liabilities: $5,000,000 5. a. A vendor selling $2 million of CT scan equipment to this hospital on credit would: Not be concerned because total assets exceed total liabilities b. Not be concerned because the debt ratio is less than one half C. PR Be somewhat concerned because the current ratio is less than one d. Not analyze the balance sheet because the vendor would care more about the income statement