11) The collection of cash from a customer on account would:
A) increase net income and shareholders' equity
B) increase assets and decrease liabilities
C) increase assets and increase net income
D) have no effect on net income or shareholders' equity
12) Dividends paid to the shareholders will:
A) increase assets and decrease liabilities
B) decrease assets and increase liabilities
C) have no effect on shareholders' equity
D) decrease assets and decrease shareholders' equity
13) What type of account is Prepaid Rent?
A) a liability
B) an expense
C) shareholders' equity
D) an asset
14) All of the following accounts are standard components of shareholders' equity
except:
A) revenues
B) dividends
C) assets
D) expenses
15) The costs of operating a business are usually called:
A) expenses
B) liabilities
C) assets
D) revenues
16) Note payable, accounts payable, and salary payable are all examples of:
A) assets
B) revenue
C) expenses
D) liabilities
17) Which of the following business events may not be recorded in a company's accounting records?
A) The company paid each of its employees a Christmas bonus.
B) The company issued 100 shares of common stock.
C) The company purchased two acres of land for future plant expansion.
D) A lawsuit has been filed by one of the company's customers (against the company).
18) The right side of a T-account is always the:
A) increase side
B) credit side
C) debit side
D) decrease side
19) The entry to record the purchase of supplies on account would include a:
A) credit to the Accounts Payable account
B) debit to the Retained Earnings account
C) credit to the Cash account
D) credit to the Supplies account
20) Credits to revenue accounts ultimately result in:
A) a decrease in owners' equity
B) an increase in owners' equity
C) a decrease in assets
D) an increase in liabilities