ACCOUNTING

Question 27 1 points Save It is easy to objectively determine the physical decline in the ability of fixed assets to provide service. True False Question 36 1 points Save Under the cash basis of accounting, no adjustments are necessary prior to the preparation of the financial statements. True False Question 40 1 points Save Accounts receivable arising from trade transactions amounted to $50,000 and $56,000 at the beginning and end of the year, respectively. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method are $105,000. $111,000. $99,000. $156,000. Question 41 1 points Save The payment of $15,000 for expenses was recorded by Spears Co. as an increase in cash of $15,000 and a decrease in retained earnings of $15,000. What is the effect of this error on the accounting equation? Total assets will exceed total liabilities and stockholders' equity by $15,000. Total assets will exceed total liabilities and stockholders' equity by $30,000. Total assets will be less than total liabilities and stockholders' equity by $30,000. The error will not affect the accounting equation. Question 42 1 points Save If Assets have a balance of $40,000 and Stockholders' Equity has a balance of $30,000, then Liabilities must have a balance of $70,000. $30,000. $40,000. $10,000. Question 47 1 points Save For EFG Co., the transaction "Payment of dividends" would increase total assets. decrease total assets. have no effect on total assets. increase stockholders' equity. Question 48 1 points Save For EFG Co., the transaction "Cash sales to customers" would increase total assets. decrease total assets. have no effect on total assets. decrease stockholders' equity. Question 50 1 points Save Miscellaneous expenses are expenses that have an undetermined amount to be paid. True False Question 51 1 points Save For EFG Co., the transaction "Payment to creditors" would increase total assets. decrease total assets. have no effect on total assets. decrease stockholders' equity. Question 53 1 points Save Stockholders' Equity will be increased by all of the following accounts EXCEPT: Dividends Revenues Owner investments All of the above increase Stockholders' Equity. Question 54 1 points Save For EFG Co., the transaction "Purchase of store equipment with a note payable" would increase total assets. decrease total assets. have no effect on total assets. decrease total liabilities. Question 55 1 points Save Exhibit 2-1 Total Assets Beginning of the year $100,000 End of the year $500,000 Total Liabilities $ 60,000 $325,000 Refer to Exhibit 2-1. What is net income, assuming $50,000 of stock was issued and $25,000 of dividends were paid? $110,000 $150,000 $190,000 $15,000 Question 56 1 points Save The first month of operation showed the net cash from operating activities to be $3,760, the net cash from investing activities to be ($5,415), and the ending cash balance to be $3,425. The net cash from financing activities must be $1,770. $5,080. $5,750. $12,600. Question 57 1 points Save When an accounts payable account is paid in cash, the stockholders' equity in the business increases. True False Question 58 1 points Save The two sides of the accounting equation do NOT have to be equal. True False Question 59 1 points Save The payment of utilities expense in cash would affect the operating activities in the statement of cash flows and the income statement but NOT the balance sheet. True False Question 67 1 points Save Merchandise with an invoice price of $6,000 is purchased subject to terms of 2/10, n/30, FOB destination. Transportation costs paid by the seller totaled $125. What is the net cost of the merchandise? $6,125 $6,005 $5,880 $5,755