Question 5 (1 point: 0.25 points each question 5.1-5.4). Multiple Choice Problem

Required: Answer IN THE ANSWER SHEET the following questions by answering A, B, C or D in the appropriate cell.

1. Wages owed to the employees would be classified as a(n):

A) Liability on the balance sheet

B) Asset on the balance sheet

C) Equity on the balance sheet

D) They would not appear on a financial statement

2. If liabilities increase by $7,000 during a given period and stockholders' equity decreases

by $3,000 during the same period, assets must have

A) Increased by $10,000

B) Increased by $4,000

C) Decreased by $10,000

D) This cannot be determined with the given information

3. A company paid 3 months rent in advance amounting to $6,000. At the end of the first

month, the proper entry would include a

A) Credit to Prepaid Rent for $6,000

B) Debit to Rent Expense for $6,000

C) Credit to Rent Expense for $2,000

D) Credit to Prepaid Rent for $2,000

4. A company is using the periodic system. It is known that initial inventory was $48,000, that ending inventory is $36,000 and that the period purchases were $68,000. What is the cost of goods sold to be reported in a period?

A) 80,000 B) 56,000 C) 16,000 D) None of the previous is correct