Question : 61. A corporation has $80,000 in total assets, $36,000 in total : 1228484

 

61. A corporation has $80,000 in total assets, $36,000 in total liabilities, and a $12,000 credit balance in retained earnings. What is the balance in the contributed capital account? 
A. $56,000
B. $44,000
C. $48,000
D. $32,000

62. The duality (or duality of effects) concept states that 
A. both the income statement and balance sheet are impacted by every transaction.
B. every transaction has an impact on assets and stockholders’ equity.
C. there are two entities involved in every transaction.
D. every transaction has at least two effects on the accounting equation.

63. Which of the following is not considered to be a recordable transaction? 
A. Signing a contract to have an outside cleaning service clean offices nightly.
B. Paying employees their wages.
C. Selling stock to investors.
D. Buying equipment and agreeing to pay a note payable and interest at the end of a year.

64. Which of the following transactions will cause both the left and right side of the accounting equation to decrease? 
A. Collecting cash from a customer who owed us money.
B. Paying a supplier for inventory we previously purchased on account.
C. Borrowing money from a bank.
D. Purchasing equipment using cash.

65. When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, which of the following are the effects on the accounting equation? 
A. Total assets decrease $50,000.
B. Total liabilities increase $150,000.
C. Total liabilities decrease $50,000.
D. Total assets increase $100,000.

66. Which of the following describes the impact on the balance sheet when a company uses cash to purchase the stock of another company? 
A. Total assets increase.
B. Stockholders’ equity increases.
C. Stockholders’ equity decreases.
D. Total assets remain the same.

67. Which of the following statements is incorrect? 
A. Stockholders’ equity accounts normally have credit balances.
B. Liability accounts are decreased by credits.
C. Stockholders’ equity accounts are increased by credits.
D. Asset accounts are increased by debits.

68. Selling stock to investors for cash would result in which of the following? 
A. A debit to contributed capital and a credit to cash.
B. A credit to both cash and contributed capital.
C. A debit to cash and a credit to contributed capital.
D. A debit to cash and a credit to retained earnings.

69. Borrowing cash from a bank would result in which of the following? 
A. A debit to cash and a credit to notes payable.
B. A debit to notes payable and a credit to cash.
C. A debit to both cash and notes payable.
D. A debit to cash and a credit to contributed capital.

70. A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase? 
A. The delivery van account is debited for $25,000.
B. Notes payable is debited for $25,000.
C. The delivery van account is debited for $30,000.
D. Cash is debited for $5,000.

 

 

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