13. Adjusting entries are needed because an entity a uses the cash basis of accounting rather than the accrual basis. b. has expenses. c. has earned reverme during the period by selling products from its central operations. d. uses the accrual basis of accounting. 14. Dunbar Corporation was incorporated on July 1, 2018. unbar Corporation issued shares to each of the six owners who paid a total of $3,000 cash. On the basis of transaction analysis, the following entry should be recorded in the accounts (dr = debit and cr=credit) a cash (cr), $3,000; shareholders' equity (dr), $3,000. b. cash (dr), $3,000; share capital (cr), $3,000. c. cash (cr), $3,000; share capital (dr), $3,000. d. cash (dr), $3,000; revenue (Cr), $3,000. 15. Which is the correct order of the steps in the accounting cycle during the accounting period? a Transaction analysis, journal entries, trial balance. b. Transaction analysis, journal entries, posting to the accounts. c. Transaction analysis, posting to the accounts, journal entries. d. Transaction analysis, posting to the accounts, adjusting the accounts. 16. Which of the following assets does NOT decline in service potential over the course of its useful life? a) equipment b) furnishings c) land d) fixtures 17. A company purchased land for $70,000 cash $7,000 was spent demolishing an old building on the land before construction of a new building could start. The cost of land would be recorded at a) $77,000 b) 570,000 c) $63,000 d) $7,000