Question 1: The Duce Company has five plants nationwide that cost a total of $100 million. The current fair value of the plants is $500 million. The plants will be recorded and reported as assets at

1. $400 million
2. $600 million
3. $500 million
4. $100 million

Question 2: The hiring of a new company president is an economic event recorded by the financial information system

1. True
2. False

Question 3: When a company distributes dividends

1. the dividends account will be increased with a credit
2. the retained earnings account will be directly increased with a debit
3. the dividends account will be decreased with a debit
4. it doesn't have to be cash, it could be another asset

Question 4: Delta72 Company received a cash advance of $700 from a customer. As a result of this event

1. stockholders' equity increased by $700
2. liabilities decreased by $700
3. assets and stockholders' equity increased by $700
4. assets increased by $700

Question 5: The double-entry system of accounting refers to the placement of a double line at the end of a column of figures

1. True
2. False

Question 6: The accounting equation for Quattro Enterprises is as follows:

$120,000 (Assets) = $60,000 (Liabilities) + $60,000 (Stockholders' Equity)

If Quattro purchases office equipment on account for $25,000, the accounting equation will change to

1. $145,000 (Assets) = $60,000 (Liabilities) + $85,000 (Stockholders' Equity)
2. $120,000 (Assets) = $60,000 (Liabilities) + $60,000 (Stockholders' Equity)
3. $145,000 (Assets) = $85,000 (Liabilities) + $60,000 (Stockholders' Equity)
4. $145,000 (Assets) = $72,500 (Liabilities) + $72,500 (Stockholders' Equity)

Question 7

The best interpretation of the word credit is the

1. increase side of an account
2. decrease side of an account
3. right side of an account
4. offset side of an account

Question 8

Collection of a $1,000 Accounts Receivable

1. decreases an asset $1,000; decreases a liability $1,000
2. increases an asset $1,000; decreases an asset $1,000
3. increases an asset $1,000; decreases a liability $1,000
4. decreases a liability $1,000; increases stockholders' equity $1,000

Question 9: On August 13, 2018, Swell Maps Enterprises purchased equipment for $1,300 and supplies of $200 on the account. Which of the following journal entries is recorded correctly and in the standard format?

O Accounts Payable 1,500 Equipment 1,300 Supplies 200 O Equipment 1,300 Supplies 200 Accounts Payable 1,500 O Equipment 1,300 Supplies 200 Accounts Payable 1,500 O Equipment 1,300 Accounts Payable 1,500 Supplies 200