1. At the beginning of 2010, the Stevens Co. had a balance of $100,000 in Retained Earnings. During 2010 the company paid a dividend of $1,000 and had net income of $12,000. What should be the balance in Retained Earnings on 12/31/10?

A. $100,000. B. $99,000 C. $111,000 D. $113,000

2. Under which of the following revenue recognition models records would your record revenue after cash has been collected?

A. Completion of Production

B. Percentage of completion

C. Installment method

D. Traditional (most common) Revenue Recognition principle

3. Which of the following expenses are usually reported using the rational and systematic allocation approach?

A. Cost of Goods Sold B. Interest Expense C. Warranty Expense

4. Which of the following is the correct journal entry for billing a customer on account for services provided of $1,000?

A. Debit Cash and credit Service Revenue 1,000

B. Debit Accounts Receivable and credit Cash 1,000

C. Debit Accounts Receivable and credit Service Revenue 1,000

D. Debit Accounts Receivable and credit Unearned Service Revenue 1,000

5. Which of the following is the correct journal entry for receiving cash payments from the customer previously billed in question 4?

A. Debit Accounts Payable and credit Cash

B. Debit Cash and credit Accounts Receivable

C. Debit Cash and credit Service Revenue

D. Debit Accounts Receivable and credit Cash