14. If a company mistakenly counts its ending inventory as higher than its actual amount, what is the effect on net income?

10. If a company’s bank reconciliation shows a bank error that incorrectly deducted $500 from the company’s account, how should this be handled? 

11. Maxwell Auto Parts had a beginning balance in accounts receivable of $12,000. It made sales of $25,000 on account and collected $18,000 in cash. What is the ending balance of accounts receivable?

5. What is the purpose of the matching principle?

14. A company receives a customer payment in advance for services to be performed next month. How should this be recorded?

7. The revenue recognition principle states that revenue should be recognized when:

16. Below is a list of 25 different accounts. For each account, indicate:- Normal balance (debit/credit)- Classification (Asset, Liability, Equity, Revenue, Expense)- Financial statement it appears on (Balance Sheet or Income Statement)Cash:  __________________  |  __________________  |  __________________Accounts Receivable:  __________________  |  __________________  |  __________________Prepaid Insurance:  __________________  |  __________________  |  __________________Inventory:  __________________  |  __________________  |  __________________Equipment:  __________________  |  __________________  |  __________________Accumulated Depreciation:  __________________  |  __________________  |  __________________Accounts Payable:  __________________  |  __________________  |  __________________Salaries Payable:  __________________  |  __________________  |  __________________Unearned Revenue:  __________________  |  __________________  |  __________________Notes Payable:  __________________  |  __________________  |  __________________Common Stock:  __________________  |  __________________  |  __________________Retained Earnings:  __________________  |  __________________  |  __________________Dividends:  __________________  |  __________________  |  __________________Service Revenue:  __________________  |  __________________  |  __________________Sales Revenue:  __________________  |  __________________  |  __________________Cost of Goods Sold:  __________________  |  __________________  |  __________________Rent Expense:  __________________  |  __________________  |  __________________Salaries Expense:  __________________  |  __________________  |  __________________Depreciation Expense:  __________________  |  __________________  |  __________________Utilities Expense:  __________________  |  __________________  |  __________________Insurance Expense:  __________________  |  __________________  |  __________________Advertising Expense:  __________________  |  __________________  |  __________________Interest Expense:  __________________  |  __________________  |  __________________Income Tax Expense:  __________________  |  __________________  |  __________________Supplies:  __________________  |  __________________  |  __________________(Continue on additional paper if needed)

20. Question 4: Statement of Cash FlowsPrepare a Statement of Cash Flows based on the following scenario:ABC Company provided the following cash-related transactions for the year ended December 31, 2024:- Collected $60,000 in cash from customers.- Paid $30,000 in wages to employees.- Purchased new machinery for $25,000 in cash.- Issued bonds and received $40,000 in cash.- Paid a $7,000 dividend to shareholders.- Paid $4,000 in interest on a loan.- Borrowed $50,000 by signing a long-term note payable.- Paid $15,000 to suppliers for raw materials.Prepare a Statement of Cash Flows using the following sections:**Operating Activities:**- Net cash provided by (used in) operating activities**Investing Activities:**- Net cash provided by (used in) investing activities**Financing Activities:**- Net cash provided by (used in) financing activities**Net Increase (Decrease) in Cash****Beginning Cash Balance****Ending Cash Balance**

8. Home Depot had $30,000 in revenue and $18,000 in expenses. What is its net income?

13. The comparability principle in accounting means that: