1.In the first month of operations, the total of the debit entries to the Cash account amounted to $1,200 and the total of the credit entries to the Cash account amounted to $800. The Cash account has a (Points : 1)

$800 credit balance. $400 debit balance. $1,200 debit balance. $400 credit balance.

Question 2.2.An investment by the stockholders in a business increases (Points : 1)

assets and stockholders' equity. assets and liabilities. liabilities and stockholders' equity. assets only.

Question 3.3.If total liabilities decreased by $4,000, then (Points : 1)

stockholders' equity must have decreased by $4,000. assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000. assets and stockholders' equity each increased by $2,000. assets must have increased by $4,000.

Question 4.4.On March 1, 2012, Freeze Company hires a new employee who will start to work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not? (Points : 1)

Yes, the company is now obligated to pay the employee, thus that event must be recorded. No, hiring an employee is an important event; however, it is not an economic event that should be recorded. Yes, failure to record the event would cause the financial statements to be misleading. No, the financial position of the company has been changed; however, the dollar amount of the transaction is not yet known.

Question 5.5.Which of the following describes the classification and normal balance of the Retained Earnings account? (Points : 1)

Asset, debit Stockholders' equity, credit Revenues, credit Expense, debit

Question 6.6.As prepaid expenses expire with the passage of time, the correct adjusting entry will be a: (Points : 1)

debit to an asset account and a credit to an expense account. debit to an expense account and a credit to an asset account. debit to an asset account and a credit to an asset account. debit to an expense account and a credit to an expense account.

Question 7.7.According to some U.S. companies what gives foreign firms a competitive advantage in the capital market? (Points : 1)

The foreign companies don't have standards similar to GAAP. The foreign companies don't have strict ethical codes. The Sarbanes-Oxley Act which requires more stringent internal controls on U.S. firms. The foreign companies don't have to be audited.

Question 8.8.When a company receives a utility bill but will not pay it right away, it should (Points : 1)

debit Utilities Expense and credit Accounts Receivable. debit Utilities Expense and credit Accounts Payable. debit Accounts Payable and credit Utilities Expense. make no entry until the bill is paid.

Question 9.9.Which of the following is a true statement about closing the books of a corporation? (Points : 1)

Expenses are closed to the Expense Summary account. Only revenues are closed to the Income Summary account. Revenues and expenses are closed to the Income Summary account. Revenues, expenses, and the Dividends account are closed to the Income Summary account.

Question 10.10.If an individual asset is increased, then (Points : 1)

there could be an equal decrease in a specific liability. there could be an equal decrease in stockholders' equity. there could be an equal decrease in another asset. none of these is possible.