14. The purpose of closing entries is to transfer: a Accounts receivable to retained earnings when an account is fully paid. b. Balances in temporary accounts to a permanent account. c Inventory to cost of goods sold when merchandise is sold. d Assets and liabilities when operations are discontinued. 15. When the amount of revenue collected in advance decreases during an accounting period: a. Accrual-basis revenues exceed cash collections from customers. b. Accrual basis net income same as cash-basis net income. C. Accrual-basis revenues are less than cash collections from customers. d. Accrual-basis net income is less than cash-basis net income.16. When converting an income statement from a cash basis to an accrual basis, which of the following is incorrect? a. An adjustment for depreciation reduces net income. b. A decrease in salaries payable decreases net income. c. A reduction in prepaid expenses decreases net income. d. An increase in accrued payables decreases net income. 21. The principal concern with accounting for related party transactions is: The size of the transactions b. Differences between economic substance and legal form, c. The absence of legally binding contracts. I d. The lack of accurate data to record transactions 22.A subsequent event for an entity with a December 31, 2016, year-end would not include: a. A change in the estimated useful lives of equipment in January 2017 b. An issuance of bonds in January 2017 An acquisition of another company in January 2017 d. A major uncertainty at December 31, resolved in January 2017 23. When a company pays its bill from a plumber for previous services on account Its debt to equity ratio always decreases 1. Its acid-test ratio always remains unchanged. c. Its current ratio always remains unchanged d. Its return on shareholders' equity always decreases 24. On December 31, 2016, the end of Larry's Used Cars' first year of operations, the accounts receivable was $53,600. The company estimates that $1,200 of the year-end receivables will not be collected. Accounts receivable in the 2016 balance sheet will be valued at: S53,600. bS54,800 CS52,400 d. $ 1.200
