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
Liabilities represent creditors’ claims on the business’s assets. Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
A creditor who has loaned money to a business has a claim to some of the assets of the business until the debt is paid. Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
A debt that a business owes is called ________. A) an asset B) a liability C) stockholders’ equity D) revenue ANSWER B
Date: September 2nd, 2020
