21) The owners' equity of any business is equal to:
A) revenues minus expenses.
B) assets minus liabilities.
C) assets plus liabilities.
D) paid-in capital plus assets.
22) The major types of transactions that affect retained earnings are:
A) paid-in capital and common stock.
B) assets and liabilities.
C) revenues, expenses, and dividends.
D) revenues and liabilities.
23) Which of the following increases retained earnings?
A) Net loss
B) Net income
C) Expenses
D) Dividends
24) Receivables are classified as:
A) increases in earnings.
B) decreases in earnings.
C) liabilities.
D) assets.
25) Net income:
A) is calculated by subtracting total expenses and total dividends from total revenues.
B) occurs when total revenues are less than total expenses.
C) is often referred to as the "bottom line" on an income statement.
D) decreases total stockholders' equity.
26) Revenues are:
A) decreases in assets resulting from delivering goods or services to customers.
B) increases in liabilities resulting from delivering goods or services to customers.
C) increases in retained earnings resulting from delivering goods or services to customers.
D) decreases in retained earnings resulting from delivering goods or services to customers.
27) Property, plant and equipment does NOT include:
A) buildings.
B) land.
C) machinery.
D) patent.
28) Expenses of a business include:
A) sales and cash equivalents.
B) common stock and rent expense.
C) cost of goods sold and salaries expense.
D) retained earnings and utilities expense.
29) Net income is computed as:
A) revenues - expenses - dividends.
B) revenues + expenses.
C) revenues - expenses.
D) revenues - expenses + dividends.
30) When total expenses exceed total revenues, the result is:
A) a net profit.
B) a net loss.
C) a dividend.
D) excess cash.