Provide explanation or calculations (if its possible)

QUESTION 5 Which of the following implicate quality of earnings? O Companies use alternative accounting methods that hamper comparability. O Companies sometimes report pro forma income measures that do not follow U.S. generally accepted accounting principles. O Companies sometimes recognize revenue prematurely and defer expense recognition resulting in reporting income and/or expenses in the wrong period. O All of the above. QUESTION 6 Entity I incurred various costs regarding its delivery truck which it purchased two years ago. For the cost that follows, indicate the proper treatment of the cost for financial accounting purposes: As part of routine maintenance, the truck's starter was replaced at a cost of $700. O Capitalized O Expensed Ignored QUESTION 7 A company may prefer to finance an expansion by issuing bonds payable rather than issuing common stock because: O current stockholders may not want to purchase more common stock earnings per share might be higher because fewer shares will be outstanding than had the company issued stock. O bond interest is tax deductible O all of the above QUESTION 8 Which of the following ratios are indicators of solvency? O current ratio O debt-to-total assets ratio O return on common stockholders' equity O gross profit rate