1. Question 1

   10 Points

   The following information pertains to the next three questions. At the beginning of the current year, X Company had assets of $600, liabilities of $300, and common stock of $100. During the current year, the company earned revenue of $750, incurred expenses of $500, and paid dividends of $100. All transactions were cash transactions.

   1. The amount of net income reported on the income statement for the current year would be

   1. $300.

   2. $250.

   3. $150.

   4. none of the above.

2. Question 2

   10 Points

   The amount of retained earnings reported on the December 31 balance sheet for the current year would be

   1. $200

   2. none of the above.

   3. $150

   4. $250

3. Question 3

   10 Points

   The amount of total assets reported on the December 31 balance sheet for the current year would be

   1. $100

   2. $750

   3. $850

   4. $600

4. Question 4

   10 Points

   The balance sheet of XYZ Company reports liabilities of $40,000, common stock of $10,000, and retained earnings of $50,000. Based on this information alone, you would know that

   1. XYZ Company has enough cash to pay off its liabilities.

   2. since the company's inception, the total amount of net income exceeded total dividends by at least $60,000.

   3. net assets of the company amounted to $20,000.

   4. total assets amounted to $100,000.

5. Question 5

   10 Points

   The Southern Company began the accounting period with assets of $600, common stock of $200, and retained earnings of $250. During the period, revenue was $300, expenses were $200, and dividends were $50. Common stock was unchanged during the accounting period. Liabilities decreased by $100. Based on this information.

   1. retained earnings at the end of the period amounted to $350.

   2. liabilities at the end of the period amounted to $100.

   3. total assets at the end of the period were $550.

   4. net income amounted to $50.

6. Question 6

   10 Points

   The entry to record revenue on account

   1. increases liabilities.

   2. decreases equity.

   3. none of the above.

   4. decreases assets.

7. Question 7

   10 Points

   Which of the following accounts is not closed at the end of the accounting period?

   1. Dividends

   2. Service Revenue

   3. Operating Expenses

   4. Retained Earnings

8. Question 8

   10 Points

   K Company collected $500 cash on an account receivable that was due from L Company. Based on this information, which of the following statements is true?

   1. K Company's total assets would not change.

   2. K Company's total assets would increase.

   3. K Company's equity would decrease.

   4. None of the above.

9. Question 9

   10 Points

   On April 1, Flavin Co. paid $12,000 cash for an insurance policy that provides coverage for one year beginning immediately. On December 31, Flavin adjusted the books to recognize the amount of the insurance policy used during the year. The amount of the adjustment would be:

   1. $12,000.

   2. $9,000.

   3. $0.

   4. $8,000.

10. Question 10

    5 Points

    Use the following information to answer the next two questions. BBC Company received $9,900 cash on February 1, 2019, from XYZ Company as advance payment for services BBC promised to perform for XYZ over the next three years on a continuous basis. Assume that BBC Company's year-end is December 31.

    12. On its 2019 income statement, BBC would report revenue of

    1. $2,750.

    2. $3,025.

    3. $9,900.

    4. $3,300.

11. Question 11

    5 Points

    On its December 31, 2020 balance sheet BBC would report liabilities of

    1. $3,300.

    2. $3,575.

    3. $9,900.

    4. $6,875.