Question : 81. Dividends A. are a period costB. are a distribution of assets to ownersC. enter : 1230539

81. Dividends 
A. are a period cost
B. are a distribution of assets to owners
C. enter into the calculation of net income
D. appear on both the balance sheet and income statement
E. none of the above

82. At the end of the third year of operation, GreenWash Corporation has total assets equal to $100,000, liabilities totaling $90,000, and contributed capital of $30,000. What is the balance in retained earnings?. 
A. $40,000 (Dr)
B. $40,000 (Cr)
C. $20,000 (Dr)
D. $20,000 (Cr)
E. $10,000 (Cr)

83. Shareholders of Forest Glen Corporation have received $35,000 in dividends in the current year. At year end the corporation has total assets of $500,000, total liabilities equal to $300,000, and contributed capital totaling $100,000. If retained earnings at the beginning of the year was $80,000, what was Forest Glen’s net income for the current year? 
A. $80,000
B. $215,000
C. $55,000
D. $10,000
E. $45,000

84. Which of the following is an example of a contra account? 
A. Merchandise Inventory
B. Accounts Payable
C. Cost of Goods Sold
D. Accumulated Depreciation
E. Deferred income taxes payable

85. Prepaid assets are valued on the balance sheet at 
A. cost paid to acquire the asset
B. acquisition cost less accumulated depreciation
C. cost less expired portion
D. replacement cost
E. present value of future cash flows

86. The result of closing entries is that balances in all temporary accounts 
A. are adjusted to historical cost
B. include monthly depreciation
C. are adjusted to zero
D. are adjusted to budgeted amounts
E. are adjusted to current values

87. Which of the following are not an example of adjusting entries? 
A. recognition of depreciation on equipment purchased during the year
B. recording the expiration of a portion of the cost of prepaid insurance that was purchased during the previous year
C. recognition of income tax expense on the net income before income taxes earned during the period
D. recording of collections received from customers during the period
E. all of the above

88. Ames Corp. purchased new equipment during the year but neglected to record depreciation. What is the effect of this omission on each of the named accounts?
     Accumulated     Retained     Depreciation
     Depreciation     Earnings         Expense 
A. Understated   Overstated     Understated
B. Understated   No effect       Overstated
C. Overstated     Understated   Understated
D. Overstated     No effect       Overstated
E. Overstated     Understated   Overstated 

89. Julia Corporation purchased an insurance policy for three years beginning January 1, Year 2, and recorded the $6,000 premium in the Prepaid Insurance account. What adjusting entry is required to reflect the proper balances, in the insurance-related accounts at year-end, on December 31, Year 2? 
A. Insurance Expense          2,000
     Prepaid Insurance                   2,000
B. Prepaid Insurance          2,000
     Insurance Expense                  2,000
C. Insurance Expense          4,000
     Prepaid Insurance                   4,000
D. Insurance Expense          6,000
     Prepaid Insurance                   6,000
E. Prepaid Insurance           4,000
Insurance Expense                  4,000

90. The income statement provides information for assessing the operating profitability of a firm. One tool used for analysis is the common-size income statement that expresses 
A. each expense and net income as a percentage of revenues
B. each revenue and net income as a percentage of expenses
C. each expense and net income as a percentage of total assets
D. each expense and net income as a percentage of shareholders’ equity
E. each revenue and net income as a percentage of shareholders’ equity