ACCT 284 SI – Practice Quiz 11) Equipment is a(n) ________ and appears on the ___________.a. Liability, Balance Sheetb. Asset, Income statementc. Asset, Balance Sheetd. Revenue, Statement of Cash Flows2) Who is responsible for the information contained within the financial statements?a. Independent Auditorsb. Managementc. Shareholdersd. The SEC3) Which of the following is not an advantage of incorporation?a. Ease of transfer of ownershipb. Increased ability to raise capitalc. Limited liability of ownersd. Double taxation4) BelowZero, Inc. buys a company car for $25,000. They sign a 3 year note on the car. What is the affect on the accounting equation?a. Assets increase $25,000, Liabilities increase $25,000b. Assets decrease $25,000, Liabilities decrease by $25,000c. Assets increase $25,000, Shareholders Equity decreases $25,000d. Does not affect the accounting equation5) Which account increases with a credit?a. Expensesb. Short Term Investmentsc. Accounts Payabled. Accounts Recievable6) What are the two components of stockholders’ equity?a. Contributed Capital and Retained Earningsb. Cash and Equipmentc. Retained Earnings and Distributed Earningsd. Revenues and Expenses7) Which of the following equations is NOT true for the financial statements?a. Assets = Liabilities + Stockholders Equityb. Ending Retained Earnings = Beginning Retained Earnings + Net Income + Dividendsc. Net Income = Revenues – Expensesd. All of the above equations are true8. Which of the following accounts is a liability?a. Inventoryb. Accounts receivablec. Prepaid expensesd. Unearned revenue9. Borden Corporation reported the following information on its 2006 financial statements:Total revenues………..$100,000Contributed Capital…..$ 85,000Liabilities…………….$150,000Assets………………...$250,000Dividends…………….$ 5,000If this is Borden’s first year of operations(NO BEGINNING RETAING EARNINGS), what amount of total expenses did Borden report during 2006?a. $120,000b. $100,000c. $ 80,000d. $ 60,00010. Davis Inc. purchased a new truck for $35,000. They paid $5,000 in cash and signed a note payable for the balance. What is the effect of this transaction on the accounting equation?Assets = Liabilities + Stockholders’ EquityAssets $950,000 Revenues $2,200,000Liabilities $300,000 Expenses $1,900,000Ending Retained Earnings $450,000 Dividends $80,00011. How much was contributed capital at the end of the year? ________________________How much was Retained Earnings at the beginning of the year?
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