Question :
111. Transactions affecting stockholders’ equity include A. shares of capital stock issued to : 1226624
111. Transactions affecting stockholders’ equity include
A. shares of capital stock issued to stockholders and payment of liabilities
B. shares of capital stock issued to stockholders, dividends declared and paid to stockholders, revenues, and expenses
C. shares of capital stock issued to stockholders, revenues, expenses, and collection of accounts receivable
D. dividends declared and paid to stockholders, revenues, expenses, and purchases of supplies on account
112. Clifford Moore purchased $15,000 of Star Tech stock for cash. Star Tech would
A. increase Assets (Cash) and increase Liabilities (Accounts Payable)
B. increase Assets (Cash) and increase Stockholders’ Equity (Capital Stock)
C. Increase Assets (Accounts Receivable) and decrease Liabilities (Accounts Payable)
D. Increase Assets (Cash) and increase Assets (Accounts Receivable)
113. Gomez Service Company paid its first installment on a note payable in the amount of $2,000. How will this transaction affect the accounting equation?
A. Increase Liabilities (Notes Payable) and decrease Assets (Cash)
B. Decrease Assets (Cash) and decrease Stockholders’ Equity (Note Payable Expense)
C. Decrease Assets (Cash) and decrease Assets (Notes Receivable)
D. Decrease Assets (Cash) and decrease Liabilities (Notes Payable)
114. Ramos Repair Company paid $750 in dividends to its stockholders. How does this transaction affect Ramos Repair Company’s accounting equation?
A. Increase Assets (Accounts Receivable) and decrease Assets (Cash)
B. Decrease Assets (Cash) and decrease Stockholders’ Equity (Dividends)
C. Decrease Assets (Cash) and decrease Liabilities (Accounts Payable)
D. Increase Assets (Cash) and decrease Stockholders’ Equity (Dividends)
115. Which of the following is not a business transaction?
A. Erin Adams receives stock in exchange for depositing $15,000 in a bank account in the name of Erin’s Lawn Service.
B. Erin’s Lawn Service provided services to customers earning fees of $600.
C. Erin Adams purchased hedge trimmers for her lawn service, agreeing to pay the supplier next month.
D. Erin Adams pays her monthly personal credit card bill.
116. The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)
A. prior period statement
B. retained earnings statement
C. income statement
D. balance sheet
117. Which of the following financial statements reports information as of a specific date?
A. income statement
B. retained earnings statement
C. statement of cash flows
D. balance sheet
118. Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The retained earnings statement (RE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?
A. I, RE, B
B. B, I, RE
C. RE, I, B
D. B, RE, I
119. Liabilities are reported on the
A. income statement
B. retained earnings statement
C. statement of cash flows
D. balance sheet
120. Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the
A. financing activities section
B. investing activities section
C. operating activities section
D. supplemental statement
121. The year-end balance of the retained earnings account appears in
A. both the retained earnings statement and the income statement
B. only the retained earnings statement
C. both the retained earnings statement and the balance sheet
D. both the retained earnings statement and the statement of cash flows
122. A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing
A. the income statement
B. the balance sheet
C. the statement of cash flows
D. cannot be determined with any of these
123. If stockholders wanted to know how money flowed into and out of the company, what financial statement would they use?
A. income statement
B. statement of cash flows
C. balance sheet
D. none of these
124. The assets section of the balance sheet normally presents assets in
A. alphabetical order
B. order of largest to smallest dollar amounts
C. in the order that they will be converted into cash or used in operations
D. any order
125. All of the following statements regarding the ratio of liabilities to stockholders’ equity are true except
A. A ratio of 1 indicates that liabilities equal stockholders’ equity.
B. The ratio is calculated as total liabilities divided by total stockholders’ equity.
C. The higher this ratio, the better able a business is to withstand poor business conditions and pay creditors.
D. The lower this ratio is, the better able a business is to withstand poor business conditions and pay creditors.
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