Question #8 (13 points)

MULTIPLE CHOICE

1. Does each of the dates below, related to dividends, require a journal entry?

1. Date of Declaration YES or NO
2. Payment Date YES or NO
3. Date of Record YES or NO

2) A company posted a $6000 debit to Cash as $600. The credit of $6000 to Service Revenue

in the entry was posted correctly. Is the trial balance out of balance?

A) No

B) Yes, by $600

C) Yes, by $5400

D) Yes, by $6000

3) A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual accounting, the doctor recognizes revenue:

A) in March

B) in July

C) in either March or July

D) at a time that cannot be determined from the facts

4) A doctor performed surgery in March and did not receive the cash from the patient until July. Under cash-basis accounting, the doctor recognizes revenue:

A) in March

B) in July

C) in either March or July

D) at a time that cannot be determined from the facts

5) Purchasing office supplies on account will:

A) Not change assets.

B) Increase assets and decrease liabilities.

C) Increase assets and increase liabilities.

D) Increase assets and increase stockholders' equity.

6) The ending balance of Retained Earnings can best be described as:

A) The amount of cash received from stockholders over the life of the company.

B) The amount of net income over the life of the company not paid to owners in the form of

dividends.

C) The amount of dividends paid over the life of the company.

D) The amount of net income over the life of the company.