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1.D. Company was started on January 1, 2013 by issuing $25,000 common stock. The company took $25,000 loan from a commercial bank. During the year, the company earned $52,000 and incurred $24,000 as expenses. The company paid $8,000 as cash dividend. The company closes its books on December 31 of each year. Determine the balance in the retained earnings account as of December 31, 2013? a. $53,000 b. $45,000 c. $61,000 d. $23,000

2.Presented below are a number of oper- ational guidelines and practices that have developed over time. Instructions Select the assumption, principle, or constraint that most appropriately justifies these procedures and practices. (Do not use qualitative characteristics.) a. Fair value changes are not recognized in the accounting records. b. Accounts receivable are recorded for sales on account rather than waiting until cash is eceived. c. Financial information is presented so that investors will not be misled. d. Intangible assets are capitalized and amortized over periods benefited. e. Brokerage companies use fair value for purposes of valuing financial securities. f. Each enterprise is kept as a unit distinct from its owner or owners. g. All significant post-statement of financial position events are reported. h. Revenue is recorded at point of sale. i. All important aspects of bond indentures are presented in financial statements. j. Rationale for accrual accounting. k. The use of consolidated statements is justified. 1. Reporting must be done at defined time intervals. m. An allowance for doubtful accounts is established. n. All payments out of petty cash are charged to Miscellaneous Expense. o. Goodwill is recorded only at time of purchase. p. Cash received and paid is not the basis used to recognize revenues and expenses. 9. A company charges its sales commission costs to expense.