Solve the MCQS

1. A distribution of additional shares of stock that reduces retained earnings but causes no change

in total stockholders' equity.

Additional paid-in capital

Stock dividend

Income from discontinued operations

Income from Extraordinary item

1. At the beginning of the current year,ABC Corporation had dividends payable of Rs. 1,600,000. During the current year, the company declared cash dividends of Rs. 4,200,000, of which Rs. 1200, 000 appeared as a liability at year-end. Determine the amount of cash dividends paid during this year.

Rs. 5,4,00,000

Rs. 5,000,000

Rs. 4,600,000

Rs. 5,800,000

1. Stockholders' equity of a corporation is normally increased in one of two ways:

Net income and Retained earnings

Common stock and Retained earnings

Paid-in capital and Retained earnings

Paid-in capital and outstanding shares

1. Identify which of the following expenditures should be classified as revenue expenditures.

Construction of a new wing on an office building.

Oil change on a company truck.

Construction of a new office

Purchase of machinery

1. Identify which of the following expenditures should be classified as capital expenditures

Construction of a new wing on an office building.

Replacement of worn out gears on factory machinery.

Oil change on a company truck.

Purchased a wastebasket at a cost of $10.