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A company performs services for a customer in December, cash is not collected until February. Following GAAP, in which month would the company recognize revenue?

Select one:

a. January

b. February

c. December

d. What is Revenue?

Question 32

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Which of the following is NOT an item deducted from an employee's gross salary to arrive at net pay to an employee?

Select one:

a. Employee portion of FICA tax for Social Security.

b. Employee portion of FICA tax for Medicare.

c. Federal unemployment tax.

d. Medical premiums paid by the employee.

Question 33

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The balance sheet of ABC Company contained the following accounts and balances:

Based on this information, what is the value of the building?

Select one:

a. $38,000

b. $12,000

c. $25,000

d. $40,000

Question 34

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Which of the following is a disadvantage of a sole proprietorship?

Select one:

a. Easy to raise capital.

b. Unlimited liability.

c. Double taxation.

d. Excessive regulation.

Question 35

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The following income statement was drawn from the annual report of Newtown Company:

What is the amount of cash flow from operating activities?

Select one:

a. $16,200 Inflow

b. $15,000 Inflow

c. $25,000 Outflow

d. $18,000 Inflow

Cash $     50,000 Building ??? Accumulated Depreciation $     25,000 Notes Payable $     13,000 Common Stock $     10,000 Retained Earnings $     40,000

Explanation / Answer

Q31) option c - December revenue is recognised when earned irrepective of fact whether received in cash or not Q32) option d Medicare premiums paid by the eomployee Q33) Cash 50,000 Notes payable 13,000 buiilding 38000 common stock 10,000 less accumulated dep -25,000 Retained earnings 40,000 total 63,000 total 63,000 option a ) $38,000 Q34) option b) unlimited liability q35) Cash from operating activities cash revenue 30,000 less:cash operating expense -12,000 Cash inflow from operating activities 18,000 option d)$18,000 inlfow

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