Dividends declared increase retained earnings.

Select one:

A. True

B. False

Question 2

Purchasing land for $500,000 by making a down payment of $100,000 and issuing a note payable for the balance will increase owners' equity.

Select one:

A. True

B. False

Question 3

Sales revenue is recognized in the period in which:

Select one:

A. Merchandise is delivered to the customer.

B. The customer orders the merchandise.

C. Cash payment is received by the seller.

D. Purchases are made to replace the merchandise sold.

Question 4

Martha had office expenses of $850 in June which she paid in July. She declared these expenses on her June income statement. By doing this she is following the accounting principle of:

Select one:

A. Revenue realization

B. Conservatism

C. Adequate disclosure

D. Matching

Question 5

Public accounting is the segment of the profession where professionals offer audit, tax and consulting services to clients.

Select one:

A. True

B. False

Question 6

Which account listed below is classified as a contra-revenue account?

Select one:

A. Cost of Goods Sold.

B. Gross profit.

C. Sales Discounts.

D. Purchases.