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QUESTION 1 On October 1, 2020, Top of the World purchases equipment for $28,000 in cash. The equipment has an expected useful life of four years and has no salvage value. The firm uses straight-line depreciation method. What adjusting entry should the company record on December 31, 2020? Assume the company uses an annual accounting period and makes all adjusting entries on December 31st a. None of the answers given are correct. ob. Debit Depreciation Expense and credit Accumulated Depreciation for $7,000. OC. Debit Depreciation Expense and credit Equipment for $1,750. od Debit Depreciation Expense and credit Cash for $28,000. O e Debit Depreciation Expense and credit Accumulated Depreciation for S1,750 QUESTION 2 Which of the following items is reported in the statement of stockholders' equity? O a Operating cash flows. b. Net income. Total assets. O d. None of the other answers are correct. O e Total expenses. QUESTION 3 Purchasing office supplies on account will: a. None of the answers given are correct. Increase assets and increase liabilities. Increase assets and increase stockholders' equity d. Increase assets and decrease liabilities. Not change assets. QUESTION 4 Consider the following items: Land Accounts Receivable Notes Payable (due in three years) Accounts Payable Retained Earnings Goodwill Deferred Revenue Buildings Notes Payable Equipment How many of the items listed above are generally long-term assets (assume accounts receivable and payable are collectable/payable within four months)? O a. Two ob. Three O.Four Od Five Six

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