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Larry the Lawyer is going to represent Bart's Brewskies in an upcoming litigation. Bart is being sued for representing his brewskies as being non-alcoholic, when in fact, they were 80-proof. Larry has asked Bart for a retainer of $1,000 before he'll even meet with Bart. Assuming the accrual basis of accounting is in play, that $1,000 is considered (for Larry): Mark one answer:

(A)Revenue and a receipt

(B)An accounts receivable

(C)A receipt

(D)Revenue

(E)An accounts payable

The Correct Answer

One purpose of GAAP is to provide _____ between accounting periods.

(A)Relativity

(B)Compression

(C)Contention

(D)Collaboration

(E)Comparability

Correct Answer: E

If equipment is used by a corporation in its operations and is sold at a loss, under which section on the statement of cash flows is this reported? Mark one answer:

(A)Operating (B)Investing (C)Financing (D)Supplemental (E)It is not reported on the statement of cash flows.

Correct Answer: A

Cartman's Cats had a total of 100,000 shares of common stock issued. In February, they reacquired 20,000 shares and did not retire them. How many shares of outstanding stock do they currently have? Mark one answer:

(A)100,000 (B)120,000 (C)20,000 (D)60,000 (E)80,000

Correct Answer: E

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