York Casting Services started the year with total assets of $110,000 and total liabilities of $50,000. The revenues and the expenses for the year amounted to $140,000 and $50,000, respectively During the year, the company did not issue any common stock, but it distributed dividends of $70,000. Calculate the amount of increase or decrease in […]
Which of the following is true of assets? A) Assets include cash, merchandise inventory, and accounts payable. B) Assets are something of value the business owns or controls. C) Assets do not need to provide future benefit to the business. D) Assets can be recorded at the expected cost if acquired at a bargain. ANSWER […]
The net income of Avid Camera Services is $20,000. The beginning and ending stockholders’ equity balances were $36,000 and $54,000, respectively. The company issued no common stock. Calculate the amount of dividends. A) $12,000 B) $2,000 C) $16,000 D) $15,000 ANSWER B .Stockholders’ Equity Beginning Balance $36,000 Add: Net Income 20,000 Less: Stockholders’ Equity Ending […]
Define assets. Provide three examples of assets. What will be an ideal response ANSWER Assets are economic resources that are expected to benefit the business in the future. Assets are something the business owns or has control of. Examples include cash, merchandise inventory, furniture, and land.
Liabilities represent creditors’ claims on the business’s assets. Indicate whether the statement is true or false ANSWER TRUE
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
A debt that a business owes is called ________. A) an asset B) a liability C) stockholders’ equity D) revenue ANSWER B
Equity increases when revenues are earned. Indicate whether the statement is true or false ANSWER TRUE
Equity decreases with expenses and revenues. Indicate whether the statement is true or false ANSWER FALSE
The three types of events that affect retained earnings are dividends, revenues, and expenses. Indicate whether the statement is true or false ANSWER TRUE
