Instructions: Chap 2: P2-5; P2-7(Pg. 78): a & b; P2-8 (Pg. 79

P 2-5 Required Answer the following multiple-choice questions: a. The balance sheet equation can be defined as which of the following? 1. Assets + Stockholders' Equity = Liabilities 2. Assets + Liabilities = Stockholders' EquityCHAPTER 2 . Introduction to Financial Statements and Other Financial Reporting Topics 77 3. Assets = Liabilities - Stockholders' Equity 4. Assets - Liabilities = Stockholders' Equity 5. None of the above b. If assets are $40,000 and stockholders' equity is $10,000, how much are liabilities? 1. $30,000 2. $50,000 3. $20,000 4. $60,000 5. $10,000 c. If assets are $100,000 and liabilities are $40,000, how much is stockholders' equity? 1. $40,000 2. $50,000 3. $60,000 4. $30,000 5. $140,000 d. Which is a permanent account? 1. Revenue ends sidi do HA 2. Advertising Expense 3. Accounts Receivable 4. Dividends 5. Insurance Expense howmotal e. Which is a temporary account? 1. Cash 2. Accounts Receivable 3 Insurance Expense 4. Accounts Payable 5. Notes Payable In terms of debits and credits, which accounts have the same normal balances? 1. Dividends, retained earnings, liabilities Willnot 2. Capital stock, liabilities, expenses be oil Exam 3. Revenues, capital stock, expenses 4/ Expenses, assets, dividends 5. Dividends, assets, liabilities5. Emerging Issues Ido P 2-7 Required Answer the following multiple-choice questions: a. Which party has the primary responsibility for the financial statements? 1 . Bookkeeper - but books together 2. Auditor - examine books 3. Management 4. Cost accountant 5. None of the above. b. Which of the following is a type of audit opinion that a firm would usually prefer? 1. Unqualified opinion A. CA clean 2. Qualified opinion 3. Adverse opinion 4. Clear opinion 5. None of the above.X P 2-8 The following are selected accounts of Laura Gibson Company on December 31: Permanent (P) or Normal Balance (Dr.) Temporary (T) or (Cr.) Cash P Accounts Receivable P Equipment P Accounts Payable Common Stock er Sales Purchases Dr Rent Expense Utility Expense Selling Expense Required In the space provided: 1. Indicate if the account is a permanent (P) or temporary (T) account. 2. Indicate the normal balance in terms of debit (Dr.) or credit (Cr.)