Value and usefulness of plant assets will decline when the business uses them in its operations. The decline in usefulness of a plant asset is an expense which is called as a depreciation expense. The correct answer is c.

A sole proprietorship is a business owned and run by one person. They are often small type businesses. Usually a small amount of capital is needed and the owner is entitled to all profits. The correct answer is E.

Advertisement Expense, Supply Expense, Depreciation Expense and Salaries-Wages Expense are credited with the same amount of their debit balances, and Income Summary account is debited. The total in this case is: 7,538,25.

Deferred expenses (prepaid expenses) are advance payments of future expenses. The correct answer is E.

Companies might sell their goods and services on account and receives a promise for future collection of cash. The Accounts Receivable account holds a customer’s promise to pay in the future for services or goods sold on account. Arises from a credit sale. The company collects cash from the customer sometime after the sale. The correct answer is A.

Debiting refers to the act of making an entry on the left side of an account

Assets = Liabilities + Owner’s Equity

The time-period concept assumes that unlimited economic life of a company will be divided into regular intervals and that financial statements will be prepared for specific periods such as a month, quarter, or year.

After closing of revenue accounts,expense accounts and Income Summary account, it is timeto prepare post-closing trial balance as the ending step in the accounting cycle. Post-closing trial balance shows the accounts with only balances. As the revenue accounts, expense accounts and Income Summary accounts were closed, it means that they have no balances. So, in the post-closing trial balance those type of accounts will not take place. Assets, liabilities and Capital accounts are the only accounts that have balances left at the end of the period.

In accrued expense, expense is recognized
before the cash is paid.

A chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger. The numbering system usually starts with the balance sheet accounts and follows with the income statement accounts.

Income Statement shows the profit or loss of the company. So, how does profit or loss occur?
The positive difference between revenues and expenses give profit whereas the negative difference gives the loss. So, in the income statement company reports revenues, expenses
and their differences.

Residual value as land has an indefinite useful life, it is not subject to depreciation.

Accounting Standards are a set of principles companies follow when they prepare and publish their financial statements They provide a systematic, standardized, way of describing the company’s financial performance.

Revenues increase on right side by crediting while decrease on left side by
debiting and normally show credit balance

In accrued expense, expense is recognized before the cash is paid. 

The correct answer is E.

An adjusted trial balance is a list of all the accounts with their adjusted balances. The purpose is to ensure that total debit balances are equal to total credit balances in the ledger after all adjustments.

The 12-month accounting period used for the annual financial statements is called as fiscal year.

The correct answer is D.

Managers of a company who plan, organize, and run the business are the most important group of internal users. Managers have different roles and these roles determine the main needs for using financial information. There are several types of external users and they can be individuals or organizations outside a company such as investors, creditors, taxing authorities, government, customers, suppliers etc.