AC/113 AC113 AC 113 UNIT 2 QUIZ

 1.

Question :

Which of the following would result in no net change in assets?

Student Answer:

 Stock issued for cash

 Expenses paid with cash

 Cash collected for fees earned

 Equipment purchased for cash

Question 2.

Question :

A to Z Corporation engaged in the following transaction: "Issued a $30,000 note payable to borrow cash from the bank." On the Statement of Cash Flows, the transaction would be classified as __________.

Student Answer:

 cash Flows from Operating Activities

 cash Flows from Investing Activities

 cash Flows from Financing Activities

 This transaction would not appear on the Statement of Cash Flows.

Question 3.

Question :

Payment of cash dividends are recorded as:

Student Answer:

 A decrease in cash and an increase in expenses

 A decrease in cash and a decrease in retained earnings

 An increase in dividend expense and a decrease in cash

 A decrease in cash and a decrease in capital stock

Question 4.

Question :

The payment of $10,000 for expenses was recorded by Spears Co. as an increase in cash of $10,000, and a decrease in retained earnings of $10,000. What is the effect of this error on the accounting equation?

Student Answer:

 Total assets will exceed total liabilities and stockholders' equity by $20,000

 Total assets will exceed total liabilities and stockholders' equity by $10,000

 Total assets will be less than total liabilities and stockholders' equity by $20,000

 The error will not affect the accounting equation

Question 5.

Question :

The income statement for August indicates net income of $50,000. The corporation also paid $10,000 in dividends during the same period. If there was a $20,000 beginning balance in stockholders' equity, what is the ending balance in stockholders' equity?

Student Answer:

 $40,000

 $70,000

 $10,000

 $60,000