Question 1

The payment of a liability:

Accepted Answer

A)  decreases assets and stockholders' equity. 
B)  increases assets and decreases liabilities. 
C)  decreases assets and increases liabilities. 
D)  decreases assets and decreases liabilities. 
A)  decreases assets and stockholders' equity. 
B)  increases assets and decreases liabilities. 
C)  decreases assets and increases liabilities. 
D)  decreases assets and decreases liabilities.

Question 2

A to Z Corporation paid a $10,000 cash dividend. On the Statement of Cash Flows, the transaction would be classified as:

Accepted Answer

A)  Cash Flows from Operating Activities. 
B)  Cash Flows from Investing Activities. 
C)  Cash Flows from Financing Activities. 
D)  Noncash transaction. 
A)  Cash Flows from Operating Activities. 
B)  Cash Flows from Investing Activities. 
C)  Cash Flows from Financing Activities. 
D)  Noncash transaction.

Question 3

Philip Corporation purchased equipment on account. What is the effect of this transaction?

Accepted Answer

A)  Cash will decrease and equipment will increase. 
B)  Total assets will remain unchanged. 
C)  Cash flow from Investing Activities will decrease. 
D)  Total assets and total liabilities will both increase. 
A)  Cash will decrease and equipment will increase. 
B)  Total assets will remain unchanged. 
C)  Cash flow from Investing Activities will decrease. 
D)  Total assets and total liabilities will both increase.

Question 4

The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements.

Accepted Answer

A) True 
 B)False

Question 5

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

Accepted Answer

A) True 
 B)False

Question 6

How can a company earn a large net income and have a small balance in retained earnings?

Accepted Answer

The company may pay

Question 7

Johnson, Inc. issued $15,000 in capital stock in exchange for cash. What is the effect of this transaction?

Accepted Answer

A)  Total assets remain unchanged. 
B)  Cash flow from Financing Activities will increase. 
C)  Net Income will increase. 
D)  Total Retained Earnings will increase. 
A)  Total assets remain unchanged. 
B)  Cash flow from Financing Activities will increase. 
C)  Net Income will increase. 
D)  Total Retained Earnings will increase.

Question 8

By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions.

Accepted Answer

A) True 
 B)False

Question 9

Stockholders' Equity will be increased by all of the following accounts except:

Accepted Answer

A)  dividends 
B)  revenues 
C)  owners' investments 
D)  all of the above increase Stockholders' Equity. 
A)  dividends 
B)  revenues 
C)  owners' investments 
D)  all of the above increase Stockholders' Equity.

Question 10

If Liabilities have a balance of $10,000 and Stockholders' Equity has a balance of $60,000, then Assets must have a balance of:

Accepted Answer

A)  $50,000. 
B)  $60,000. 
C)  $70,000. 
D)  $10,000. 
A)  $50,000. 
B)  $60,000. 
C)  $70,000. 
D)  $10,000.

Question 11

Which of the following transactions changes the mix of assets only?

Accepted Answer

A)  Paid for supplies with cash. 
B)  Borrowed money from Second National Bank. 
C)  Received money for fees earned. 
D)  Received a utility bill. 
A)  Paid for supplies with cash. 
B)  Borrowed money from Second National Bank. 
C)  Received money for fees earned. 
D)  Received a utility bill.

Question 12

Johnson, Inc. purchased land for cash. What effect does this transaction have?

Accepted Answer

A)  Increase in Cash and decrease in Land 
B)  Decrease in Cash and decrease in Land 
C)  Increase in Cash and increase in Land 
D)  Decrease in Cash and increase in Land 
A)  Increase in Cash and decrease in Land 
B)  Decrease in Cash and decrease in Land 
C)  Increase in Cash and increase in Land 
D)  Decrease in Cash and increase in Land

Question 13

An increase in Stockholders' Equity from revenues earned will also result in an increase in:

Accepted Answer

A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  cash flow from financing activities. 
A)  liabilities. 
B)  assets. 
C)  expenses. 
D)  cash flow from financing activities.

Question 14

The basic elements of a financial accounting system include a framework for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 2-1 $\begin{array}{lll}
\text { Total Liabilities } & \text { Total Assets } & \
\$ 60,000 & \$ 100,000 & \text { Beginning of the year } \
\$ 325,000 & \$ 500,000 & \text { End of the year }
\end{array}$

Refer to Exhibit 2-1. What is net income, assuming no stock was issued and dividends of $25,000 were paid?

Accepted Answer

A)  $110,000 
B)  $150,000 
C)  $160,000 
D)  $200,000 
A)  $110,000 
B)  $150,000 
C)  $160,000 
D)  $200,000

Question 16

The accounting equation can be expressed as: Assets - Liabilities = Revenues.

Accepted Answer

A) True 
 B)False

Question 17

Refer to Coke's balance sheet and answer the following questions:
   (a)Did Coke issue any stock in 2008 ? If so, how many shareswere issued and where might this information be found?
 (b)Did Coke repurchase any common sto ck in 2008 ? If so, how many shareswere repurchased and where might this information be found?

Accepted Answer

The answer of Refer to Coke's balance sheet and answer...

Question 18

The payment of utilities expense in cash would affect the operating activities in the statement of cash flows and the income statement but not the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is not true about liabilities?

Accepted Answer

A)  Liabilities are debts owed to outsiders. 
B)  Account titles of liabilities often include the term "payable." 
C)  Cash received before services are performed is considered to be a liability. 
D)  Liabilities include insurance premium paid in advance. 
A)  Liabilities are debts owed to outsiders. 
B)  Account titles of liabilities often include the term "payable." 
C)  Cash received before services are performed is considered to be a liability. 
D)  Liabilities include insurance premium paid in advance.

Question 20

For EFG Co., the transaction "payment of dividends" would:

Accepted Answer

A)  increase total assets. 
B)  decrease total assets. 
C)  have no effect on total assets. 
D)  increase stockholders' equity. 
A)  increase total assets. 
B)  decrease total assets. 
C)  have no effect on total assets. 
D)  increase stockholders' equity.

The payment of a liability:

A to Z Corporation paid a $10,000 cash dividend. On the Statement of Cash Flows, the transaction would be classified as:

Philip Corporation purchased equipment on account. What is the effect of this transaction?

The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements.

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

How can a company earn a large net income and have a small balance in retained earnings?

Johnson, Inc. issued $15,000 in capital stock in exchange for cash. What is the effect of this transaction?

By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions.

Stockholders' Equity will be increased by all of the following accounts except:

If Liabilities have a balance of $10,000 and Stockholders' Equity has a balance of $60,000, then Assets must have a balance of:

Which of the following transactions changes the mix of assets only?

Johnson, Inc. purchased land for cash. What effect does this transaction have?

An increase in Stockholders' Equity from revenues earned will also result in an increase in:

The basic elements of a financial accounting system include a framework for preparing financial statements.

Exhibit 2-1 Total Liabilities Total Assets \ 60,000 \ 100,000 Beginning of the year \ 325,000 \ 500,000 End of the year Refer to Exhibit 2-1. What is net income, assuming no stock was issued and dividends of $25,000 were paid?

The accounting equation can be expressed as: Assets - Liabilities = Revenues.

The payment of utilities expense in cash would affect the operating activities in the statement of cash flows and the income statement but not the balance sheet.

Which of the following statements is not true about liabilities?

For EFG Co., the transaction "payment of dividends" would:

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 2: Basic Accounting Concepts

The payment of a liability:

A to Z Corporation paid a $10,000 cash dividend. On the Statement of Cash Flows, the transaction would be classified as:

Philip Corporation purchased equipment on account. What is the effect of this transaction?

The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements.

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

How can a company earn a large net income and have a small balance in retained earnings?

Johnson, Inc. issued $15,000 in capital stock in exchange for cash. What is the effect of this transaction?

By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions.

Stockholders' Equity will be increased by all of the following accounts except:

If Liabilities have a balance of $10,000 and Stockholders' Equity has a balance of $60,000, then Assets must have a balance of:

Which of the following transactions changes the mix of assets only?

Johnson, Inc. purchased land for cash. What effect does this transaction have?

An increase in Stockholders' Equity from revenues earned will also result in an increase in:

The basic elements of a financial accounting system include a framework for preparing financial statements.

Exhibit 2-1 Total Liabilities Total Assets \ 60,000 \ 100,000 Beginning of the year \ 325,000 \ 500,000 End of the year Refer to Exhibit 2-1. What is net income, assuming no stock was issued and dividends of $25,000 were paid?

The accounting equation can be expressed as: Assets - Liabilities = Revenues.

The payment of utilities expense in cash would affect the operating activities in the statement of cash flows and the income statement but not the balance sheet.

Which of the following statements is not true about liabilities?

For EFG Co., the transaction "payment of dividends" would:

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters