Question : Multiple Choice Questions 31. Which of the following statements about stockholders’ equity : 1228481

Multiple Choice Questions
 

31. Which of the following statements about stockholders’ equity is false? 
A. Stockholders’ equity is the shareholders’ residual interest in the company resulting from the difference in assets and liabilities.
B. Stockholders’ equity accounts are increased with credits.
C. Stockholders’ equity results only from contributions of the owners.
D. The purchase of land for cash has no effect on stockholders’ equity.

32. Assets, liabilities, and stockholders’ equity are found within which of the following financial statements? 
A. Balance sheet
B. Income statement
C. Statement of retained earnings
D. Statement of cash flows

33. An account payable would be reported within which of the following financial statements? 
A. Statement of cash flows
B. Income statement
C. Balance sheet
D. Statement of retained earnings

34. Which of the following assumptions implies that a business can continue to remain in operation into the foreseeable future? 
A. Historical cost principle
B. Unit-of-measure assumption
C. Continuity assumption
D. Separate-entity assumption

35. Which of the following best describes assets? 
A. Resources with possible future economic benefits owed by an entity as a result of past transactions.
B. Resources with probable future economic benefits owned by an entity as a result of past transactions.
C. Resources with probable future economic benefits owned by an entity as a result of future transactions.
D. Resources with possible future economic benefits owed by an entity as a result of future transactions.

36. Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners? 
A. Unit-of-measure assumption
B. Continuity assumption
C. Historical cost principle
D. Separate entity assumption

37. Which of the following best describes liabilities? 
A. Possible debts or obligations of an entity as a result of future transactions which will be paid with assets or services.
B. Possible debts or obligations of an entity as a result of past transactions which will be paid with assets or services.
C. Probable debts or obligations of an entity as a result of future transactions which will be paid with assets or services.
D. Probable debts or obligations of an entity as a result of past transactions which will be paid with assets or services.

38. Which of the following is included within current assets on a balance sheet? 
A. Land used in daily operations.
B. A truck used in daily operations.
C. Inventory which takes two years to manufacture.
D. Intangible assets.

39. Chad Jones is the sole owner and manager of Jones Glass Repair Shop. Jones purchased a truck for $30,000 to be used in the business. Which of the following fundamentals requires Jones to record the truck at the price paid to buy it? 
A. Separate-entity assumption
B. Revenue principle
C. Unit-of-measure assumption
D. Historical cost principle

40. In what order are current assets listed on a balance sheet? 
A. By dollar amount (largest first).
B. By date of acquisition (earliest first).
C. By liquidity.
D. By relevance to the operation of the business.