Bubble Wraps Company receives cash from a stockholder, John Trent, and issues common stock to him. The two accounts involved in this transaction are ________. A) Accounts Payable and Cash B) Cash and Common Stock C) Common Stock and Accounts Payable D) Common Stock and Accounts Receivable ANSWER B
Date: September 2nd, 2020
Lush Lawns Corporation earned $1,000 for lawn mowing services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction? A) Accounts Payable B) Supplies C) Cash D) Accounts Receivable ANSWER D
Date: September 2nd, 2020
Aventis Company distributes cash dividends. How does this transaction affect the accounting equation? A) The assets, liabilities, and equity remain the same. B) The assets decrease and equity decreases. C) The assets increase and liabilities decrease. D) The assets decrease and equity increases. ANSWER B
Date: September 2nd, 2020
Hamilton Lawn Services incurred $800 as a repair expense and paid for it in cash. This transaction will ________. A) decrease the stockholders’ equity B) increase the assets of the business C) increase the liabilities of the business D) decrease the liabilities of the business ANSWER A
Date: September 2nd, 2020
Harris Landscaping Services incurred $500 as a labor expense and promised to pay the labor agency within 30 days. Which of the following accounts will increase as a result of this transaction? A) Accounts Receivable B) Cash C) Accounts Payable D) Retained Earnings ANSWER C
Date: September 2nd, 2020
________ is the equity earned by profitable operations that is not distributed to stockholders. A) Assets B) Dividend C) Retained earnings D) Common stock ANSWER C
Date: September 2nd, 2020
Wallace Repair Corporation incurred $1,500 as a labor expense and promised to pay the labor agency within 30 days. Which of the following will decrease as a result of this transaction? A) Assets B) Stockholders’ equity C) Liabilities D) Revenues ANSWER B
Date: September 2nd, 2020
Which of the following is true of retained earnings? A) Retained earnings decrease with payment of dividends. B) Retained earnings increase with purchase of assets. C) Retained earnings decrease with collection of revenue. D) Retained earnings increase with payment on account. ANSWER A
Date: September 2nd, 2020
Marsh Supply Services paid $350 cash to a materials supplier, the amount owed from the previous month. Which of the following accounts decreases? A) Accounts Receivable B) Accounts Payable C) Retained Earnings D) Office Supplies ANSWER B
Date: September 2nd, 2020
Equity of a corporation is broken out into two components. Which of the following are the two components of the equity of a corporation? A) current assets and fixed assets B) common stock and liabilities C) revenues and expenses D) contributed capital and retained earnings ANSWER D
Date: September 2nd, 2020
