Question 1

How would a sale of $400 of inventory on credit affect the balance sheet if the cost of the inventory sold was $160?

		It would increase noncash assets by $400 and increase equity by $400
		It would decrease noncash assets by $160 and decrease equity by $160
		It would increase cash by $400 and increase equity by $400
		Both the first and the second choices, above happen simultaneously
Question 2

How would a purchase of inventory on credit affect the income statement?

		It would increase liabilities
		It would decrease retained earnings
		It would increase assets
		None of the above

Question 4

Which one of the following statement(s) is (are) most likely to be TRUE? I. When shareholders contribute capital to a company, earned capital increases because the company has earned the shareholders investments. II. Revenues and expenses affect the income statement but not the balance sheet. III. Retained earnings articulate across time which means that last periods retained earnings plus current period net income (or loss) is equal to the current periods retained earnings. IV. Revenue is typically recorded as earned when cash is received because that is when the company can measure the revenue objectively.

		I and III only
		II only
		IV only
		None of the above

Question 5

During fiscal year-end 2016, Kohls Corporation reports the following (in $ millions): net income of $556, retained earnings at the end of the year of $12,522 and retained earnings at the beginning of the year of $12,329. Assume that there were no other retained earnings transactions during fiscal 2016. What dividends did the firm pay in fiscal year ended January 28, 2017?

		$ 683 million
		$ 1,669 million
		$ 363 million
		$ -0-