1. The accounts payable account has a beginning balance of $12 000 and we purchased $50 000 of inventory on credit during the month. The ending balance was $10 000. How much did we pay our creditors during the month?

   1. $50 000

   2. $52 000

   3. $60 000

   4. $62 000

2. Time corporation reported for the following for 2006

Capital stock- 20 000 shares outstanding

Revenues- $500 000

Expenses- $350 000

What was the amount of the earnings per share?

1. $3.00

2. $12.50

3. $25.00

4. $7.50

5. None of the above is correct

6. A stock dividend

   1. Results in a transfer of retained earnings to contributed capital

   2. Increases the number of shares outstanding and involves a pro rata reduction in the par value per share

   3. Is accounted for in exactly the same manner as a stock split

   4. Both a and b are correct

   5. None of the above is correct

7. Which of the following statements is true

   1. Accumulated depreciation is a contra account in the income statement

   2. The current ratio is current assets divided by current liabilities

   3. Retained earnings is the accumulated earnings plus the accumulated dividends paid

   4. Book value of the building is the cost less the current years depreciation

   5. None of the above is correct