Question 1

When closing Income Summary, assuming the corporation had net income for the accounting period, the account Retained Earnings is credited.

Accepted Answer

A) True 
 B)False

Question 2

When a corporation declares a dividend:

Accepted Answer

A)  Assets decrease, liabilities increase. 
B)  Retained earnings increase, liabilities increase. 
C)  Liabilities increase, retained earnings decrease. 
D)  Retained earnings decrease, assets increase. 
A)  Assets decrease, liabilities increase. 
B)  Retained earnings increase, liabilities increase. 
C)  Liabilities increase, retained earnings decrease. 
D)  Retained earnings decrease, assets increase.

Question 3

The retained earnings account of Company XYZ has a balance of $350,000 at the end of 2010. At the end of 2011 the following information is available.
What is the amount of retained earnings at the end of 2011?
 $$\begin{array} { | l | r | } 
\hline \text { Cash } & \$ 37,000 \
\hline \text { Dividends Declared } & 45,000 \
\hline \text { Common Stock } & 200,000 \
\hline \text { Net Income } & 175,000 \
\hline \text { Dividends Payable } & 45,000 \
\hline
\end{array}$$

Accepted Answer

The answer of The retained earnings account of Company XYZ...

Question 4

The entry to record the issuance of 100 shares of capital stock in exchange for $1,000 cash includes a debit to Capital Stock.

Accepted Answer

A) True 
 B)False

Question 5

Sally Smythe enters into a partnership by contributing the following: Cash $15,000; Accounts Receivable $4,500; Machinery which cost $3,000 and has a fair market value of $2,125; and accounts payable of $1,200. What amount will be recorded in her capital account?

Accepted Answer

A)  $21,625. 
B)  $20,425. 
C)  $22,500. 
D)  $21,300. 
A)  $21,625. 
B)  $20,425. 
C)  $22,500. 
D)  $21,300.

Question 6

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is:

Accepted Answer

A)  A Above. 
B)  B Above. 
C)  C Above. 
D)  D Above. 
A)  A Above. 
B)  B Above. 
C)  C Above. 
D)  D Above.

Question 7

Limited personal liability is a characteristic of a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 8

Shareholders report and pay income tax on dividends received from a corporation.

Accepted Answer

A) True 
 B)False

Question 9

Paid-in Capital refers to:

Accepted Answer

A)  The lifetime earnings of the corporation. 
B)  The amount invested by stockholders. 
C)  Net income less dividends. 
D)  The amount in excess of the par value of the stock. 
A)  The lifetime earnings of the corporation. 
B)  The amount invested by stockholders. 
C)  Net income less dividends. 
D)  The amount in excess of the par value of the stock.

Question 10

The ability of a sole proprietorship to pay its debts may be determined by the financial strength of the owner.

Accepted Answer

A) True 
 B)False

Question 11

In a sole proprietorship the balance in the Income Summary account is closed to:

Accepted Answer

A)  Retained earnings. 
B)  Capital. 
C)  Drawing. 
D)  Net Income. 
A)  Retained earnings. 
B)  Capital. 
C)  Drawing. 
D)  Net Income.

Question 12

In a limited liability partnership, a partner has unlimited liability for his own actions and limited liability for the actions of his partners.

Accepted Answer

A) True 
 B)False

When closing Income Summary, assuming the corporation had net income for the accounting period, the account Retained Earnings is credited.

When a corporation declares a dividend:

The entry to record the issuance of 100 shares of capital stock in exchange for $1,000 cash includes a debit to Capital Stock.

Sally Smythe enters into a partnership by contributing the following: Cash $15,000; Accounts Receivable $4,500; Machinery which cost $3,000 and has a fair market value of $2,125; and accounts payable of $1,200. What amount will be recorded in her capital account?

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is:

Limited personal liability is a characteristic of a sole proprietorship.

Shareholders report and pay income tax on dividends received from a corporation.

Paid-in Capital refers to:

The ability of a sole proprietorship to pay its debts may be determined by the financial strength of the owner.

In a sole proprietorship the balance in the Income Summary account is closed to:

In a limited liability partnership, a partner has unlimited liability for his own actions and limited liability for the actions of his partners.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

The Time Value of Money: Future Amounts and Present Values Answer Key

Filters

Exam 28: Forms of Business Organization

When closing Income Summary, assuming the corporation had net income for the accounting period, the account Retained Earnings is credited.

When a corporation declares a dividend:

The entry to record the issuance of 100 shares of capital stock in exchange for $1,000 cash includes a debit to Capital Stock.

Sally Smythe enters into a partnership by contributing the following: Cash $15,000; Accounts Receivable $4,500; Machinery which cost $3,000 and has a fair market value of $2,125; and accounts payable of $1,200. What amount will be recorded in her capital account?

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is:

Limited personal liability is a characteristic of a sole proprietorship.

Shareholders report and pay income tax on dividends received from a corporation.

Paid-in Capital refers to:

The ability of a sole proprietorship to pay its debts may be determined by the financial strength of the owner.

In a sole proprietorship the balance in the Income Summary account is closed to:

In a limited liability partnership, a partner has unlimited liability for his own actions and limited liability for the actions of his partners.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

The Time Value of Money: Future Amounts and Present Values Answer Key

Filters