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Question 1

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Stockholders equity can be described as claims of

a.

creditors on total assets.

b.

owners on total assets.

c.

customers on total assets.

d.

debtors on total assets.

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Question 2

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If total liabilities increased by $69,000 during a period of time and stockholders equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a

a.

$96,000 increase.

b.

$69,000 increase.

c.

$42,000 decrease.

d.

$42,000 increase.

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Question 3

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Pinson Company began the year with retained earnings of $670,000. During the year, the company recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000. What was Pinsons retained earnings at the end of the year?

a.

$750,000

b.

$1,130,000

c.

$1,030,000

d.

$600,000

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Question 4

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Kilmer Corporation began the year with retained earnings of $930,000. During the year, the company issued $1,260,000 of common stock, recorded expenses of $3,600,000, and paid dividends of $240,000. If Kilmers ending retained earnings was $990,000, what was the companys revenue for the year?

a.

$4,920,000

b.

$3,660,000

c.

$50,160,000

d.

$3,900,000

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Question 5

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Common stock is reported on the

a.

statement of cash flows.

b.

retained earnings statement.

c.

balance sheet.

d.

income statement.

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Question 6

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Lankston Company began the year by issuing $120,000 of common stock for cash. The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000. What was Lankstons net income for the year?

a.

$200,000

b.

$80,000

c.

$260,000

d.

$140,000

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Question 7

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Which of the following is not a satisfactory statement of the accounting equation?

a.

Assets = Liabilities + Stockholders Equity

b.

Assets - Liabilities = Stockholders Equity

c.

Assets = Stockholders Equity Liabilities

d.

Assets - Stockholders Equity = Liabilities

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Question 8

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Ashleys Accessory Shop started the year with total assets of $210,000 and total liabilities of $120,000. During the year, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000. The net income reported by Ashleys Accessory Shop for the year was

a.

$195,000.

b.

$165,000.

c.

$150,000.

d.

$120,000.

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Question 9

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Jimmys Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000. The net income reported by Jimmys Repair Shop for the year was

a.

$300,000.

b.

$180,000.

c.

$240,000.

d.

$570,000.

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Question 10

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Stockholders equity is comprised of

a.

net income and retained earnings

b.

common stock and dividends.

c.

dividends and retained earnings.

d.

common stock and retained earnings.

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Question 11

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Gilkey Corporation began the year with retained earnings of $310,000. During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000. If Gilkeys ending retained earnings was $330,000, what was the companys revenue for the year?

a.

$1,720,000

b.

$1,640,000

c.

$1,220,000

d.

$1,300,000

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Question 12

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Elston Company compiled the following financial information as of December 31, 2022:

Service revenue $840,000

Common stock 180,000

Equipment 240,000

Operating expenses 750,000

Cash 210,000

Dividends 60,000

Supplies 30,000

Accounts payable 120,000

Accounts receivable 300,000

Retained earnings, 1/1/22 450,000

Elstons stockholders equity on December 31, 2022 is

a.

$660,000.

b.

$480,000.

c.

$630,000.

d.

$720,000.

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Question 13

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Henson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Hensons retained earnings at the end of the year?

a.

$500,000

b.

$540,000

c.

$460,000

d.

$840,000

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Question 14

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A balance sheet shows

a.

assets, liabilities, and stockholders equity.

b.

revenues, expenses, and dividends.

c.

revenues, liabilities, and stockholders equity.

d.

expenses, dividends, and stockholders equity.

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Question 15

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Marvin Services Corporation had the following accounts and balances:

Accounts payable

$30,000

Equipment

$35,000

Accounts receivable

5,000

Land

35,000

Buildings

?

Unearned service revenue

10,000

Cash

15,000

Total stockholders' equity

?

If the balance of the Buildings account was $70,000 and $5,000 of Accounts Payable were paid in cash, what would be the balance of the total stockholders' equity?

a.

$120,000

b.

$170,000

c.

$130,000

d.

$135,000

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Question 16

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The retained earnings statement

a.

presents the revenues and expenses for a specific period of time.

b.

reports the assets, liabilities, and stockholders equity at a specific date.

c.

summarizes the changes in retained earnings for a specific period of time.

d.

reports the changes in assets, liabilities, and stockholders equity over a period of time.

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Question 17

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Finney Company began the year by issuing $80,000 of common stock for cash. The company recorded revenues of $740,000, expenses of $640,000, and paid dividends of $40,000. What was Finneys net income for the year?

a.

$60,000

b.

$100,000

c.

$180,000

d.

$140,000

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Question 18

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If total liabilities decreased by $105,000 and stockholders equity decreased by $35,000 during a period of time, then total assets must change by what amount and direction during that same period?

a.

$70,000 decrease

b.

$70,000 decrease

c.

$140,000 increase

d.

$140,000 decrease

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Question 19

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In a study session, a classmate makes this statement Dividends are listed as expenses on the income statement. What is your best response to this statement?

a.

You are right. Revenues and expenses are shown on the income statement. Dividends are a cost of generating revenues and that makes them an expense. Why else would a corporation pay dividends?

b.

Dividends represent a portion of corporate profits that are paid to the shareholders. They belong on the retained earnings statement.

c.

Ive been struggling with that concept and I feel that dividends should be shown on the balance sheet as assets.

d.

Dividends are deducted from retained earnings on the balance sheet.

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Question 20

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If total liabilities increased by $69,000 during a period of time and stockholders equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a

a.

$69,000 increase.

b.

$42,000 decrease.

c.

$42,000 increase.

d.

$96,000 increase.

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Question 21

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Marvin Services Corporation had the following accounts and balances:

Accounts payable $30,000

Accounts receivable $5,000

Land $35,000

Buildings $75,000

Unearned service revenue $10,000

Cash $50,000

Total stockholders' equity ?

What would be the total stockholders' equity?

a.

$115,000

b.

$65,000

c.

$125,000

d.

$90,000