1-At the beginning of the year, ABC Company’s liabilities equal $105,000. During the year, assets increased by $20,000 and at the end of the year…

1-At the beginning of the year, ABC Company’s liabilities equal $105,000. During the year, assets increased by $20,000 and at the end of the year assets equal $250,000. Liabilities increase by $35,000 during the year. Calculate the amount of equity at the beginning of the year.

$230,000

$140,000

$110,000

$170,000

$125,000

2-At the beginning of the year, ABC Company’s liabilities equal $75,000. During the year, assets increased by $80,000 and at the end of the year assets equal $250,000. Liabilities decrease by $25,000 during the year. Calculate the amount of equity at the end of the year.

$50,000

$95,000

$105,000

$170,000

$200,000

3-On January 31, Harrington Corporation, a consulting company, had accounts receivable in the amount of $10,000, During February, payments from customers on account totaled $5,000. At the end of February, Harrington had accounts receivable in the amount of $12,000. What was the amount of consulting services provided to customers on credit during the month of February?

$2,000

$3,000

$7,000

$27,000

Cannot be determined

4-n July 12, Ron Truro (owner of Truro Excavating) completed work for a customer on account in the amount of $4,300. The journal entry necessary to record this transaction is:

debit Account Payable for $4,300; credit Service Revenue for $4,300

debit Account Receivable for $4,300; credit Unearned Revenue for $4,300

debit Service Revenue for $4,300; credit Account Receivable for $4,300

debit Account Receivable for $4,300; credit Service Revenue for $4,300

debit Service Revenue for $4,300; credit Account Payable for $4,300

5-On July 30, Ron Truro (owner of Truro Excavating) received an advance payment from a customer in the amount of $5,000; the work will be completed in August. The journal entry necessary to record this transaction is:

debit Cash for $5,000; credit Unearned Revenue for $5,000

debit Service Revenue for $5,000; credit Cash for $5,000

debit Unearned Revenue for $5,000; credit Cash for $5,000

debit Cash for $5,000; credit Service Revenue for $5,000

debit Account Receivable for $5,000; credit Unearned Revenue for $5,000

6-GAAP is based on

the accrual basis

both the cash basis and the accrual basis

the cash basis

neither the cash basis nor the accrual basis

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