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question 5, 6, and 7
7 D is 210,000
5. Revenues and Expenses are recorded: A. Because cash is received or paid. B. Instead of cash being received or paid. C. Whe
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Answer #1

5. Correct choice- B) When revenue is earned or expenses are incurred-

Explanation-Under accrual basis accounting income is not recorded until earned and expenses are not recorded until incurred.It means that usually revenue occurs when goods are transferred or services rendered and an expense is recoreded when actually incurred in an businesses efforts to generate revenue.

6.Correct choice- C) Matching revenues and expenses.

Explanation-Under accrual basis accounting expenses are matched with related revenues and are reported when the expense is incurred, irrespective to cash recieved or paid. Therefore, accounting concept/principles are applied when adjusting entries are required due to the matching principle or Matching revenues and expenses for the period.

7. Correct choice- A) $1,15,000.

Under generally accepted accounting principles (GAAP), fixed assets/non current assets (as Land in given case) are recorded at its original cost when acquired by the company. This concept is also supported by the Historical cost concept of accounting. So Increases in market value are disregarded in the balance sheet due to non current assets.

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