15) The business collects a $5,000 account receivable from its customer. How is the accounting equation affected?
A) Assets increase $5,000; liabilities decrease $5,000.
B) One asset increases by $5,000; another asset decreases $5,000.
C) Assets increase $5,000; liabilities increase $5,000.
D) Assets increase $5,000; stockholders' equity increases $5,000.
16) Total liabilities increase by $7,000. How is the accounting equation affected?
A) Either assets have increased by $7,000, or stockholders' equity has decreased by $7,000.
B) Assets have decreased by $7,000.
C) Assets and stockholders' equity have each decreased by $3,500.
D) Stockholders' equity has increased by $7,000.
17) An individual asset has increased. Which of the following is possible?
A) There is an equal decrease in another asset.
B) There is an equal decrease in stockholders' equity.
C) There is an equal decrease in a liability account.
D) Both liabilities and stockholders' equity decrease.
18) Scott's Camera Shop, Inc. started the year with total assets of $80,000 and total liabilities of $40,000. During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott paid dividends of $60,000.
What is the amount of Scott's stockholders' equity at the end of the year?
A) $40,000
B) $50,000
C) $30,000
D) $10,000
19) Scott's Camera Shop, Inc. started the year with total assets $80,000 and total liabilities of $40,000. During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott paid dividends of $60,000.
What is the amount of Scott's Camera Shop Inc.'s net income for the year?
A) $50,000
B) $10,000
C) $30,000
D) $40,000
20) Scott's Camera Shop, Inc. started the year with total assets $80,000 and total liabilities of $40,000.
During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott paid dividends of $60,000.
The net change in Scott's stockholders' equity for the year is a:
A) $10,000 decrease.
B) $40,000 increase.
C) $30,000 decrease.
D) $50,000 increase.
21) Net income is $29,000. Beginning retained earnings were $34,000. Ending retained earnings are $55,000. What amount of cash dividends was paid out?
A) $18,000
B) $8,000
C) $5,000
D) $60,000
22) Sharon Samson starts a plumbing service, Reliable Waterworks, Inc. Selected transactions are described as follows:
A) Sharon deposits $7,000 into a new checking account for the company, receiving stock in exchange.
B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs.
C) Reliable borrows $15,000 from a local bank and deposits the money in the checking account.
D) Reliable pays $600 rent for the first month.
E) Reliable pays $400 cash for plumbing supplies to be used on various jobs in the future.
F) Reliable completes a plumbing repair project for a local lawyer and receives $1,300 cash.
G) Reliable pays dividends of $2,500.
After all of the transactions, what is the amount of total assets?
A) $25,700
B) $5,200
C) $24,200
D) $20,200
23) Sharon Samson starts a plumbing service, Reliable Waterworks, Inc. Selected transactions are described as follows:
A) Sharon deposits $7,000 into a new checking account for the company, receiving stock in exchange.
B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs.
C) Reliable borrows $15,000 from a local bank and deposits the money in the checking account.
D) Reliable pays $600 rent for the first month.
E) Reliable pays $400 cash for plumbing supplies to be used on various jobs in the future.
F) Reliable completes a plumbing repair project for a local lawyer and receives $1,300 cash.
G) Reliable pays dividends of $2,500.
After all of the transactions, what is the amount of total liabilities?
A) $15,000
B) $4,000
C) $19,000
D) $4,400
24) Sharon Samson starts a plumbing service, Reliable Waterworks, Inc. Selected transactions are described as follows:
A) Sharon deposits $7,000 into a new checking account for the company, receiving stock in exchange.
B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs.
C) Reliable borrows $15,000 from a local bank and deposits the money in the checking account.
D) Reliable pays $600 rent for the first month.
E) Reliable pays $400 cash for plumbing supplies to be used on various jobs in the future.
F) Reliable completes a plumbing repair project for a local lawyer and receives $1,300 cash.
G) Reliable pays dividends of $2,500.
After all of the transactions, what is the amount of total stockholders' equity?
A) $5,200
B) $20,200
C) $7,700
D) $7,300