Accountancy Test Questions with Answers Essay

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160. At October 1, Arcade Fire Enterprises reported stockholders' equity of $35,000. During October, common stock of $5,000 was issued and the company posted a net loss of $2,000. If stockholders' equity at October 31 totals $35,000, what amount of dividends were paid during the month? ✔
1. a. $0
2. b. $2,000
3. c. $3,000 - Given
4. d. $5,000
143. Black Keys Company began the year with stockholders' equity of $185,000. During the year, the company recorded revenues of $250,000, expenses of $190,000, and paid dividends of $20,000. What was Black Keys’ stockholders' equity at the end of the year? ✖
1. a. $185,000.
2. b. $225,000.
3. c. $245,000. - Given
4. d. $265,000.
134. An income statement ✖
1. a. summarizes the changes in retained earnings for a specific period of time.
2. b. reports the changes in assets, liabilities, and stockholders` equity over a period of time.
3. c. reports the assets, liabilities, and stockholders` equity at a specific date.
4. d. presents the revenues and expenses for a specific period of time.
151. Teamboo Company’s stockholders' equity at the beginning of August 2013 was $300,000. During the month, the company earned net income of $70,000 and paid dividends of $30,000. At the end of August 2013, what is the amount of stockholders' equity? ✖
1. a. $270,000
2. b. $300,000 - Given
3. c. $330,000
4. d. $340,000
135. If the retained earnings account increases from the beginning of the year to the end of the year, then ✖
1. a. net income is less than dividends.
2. b. a net loss is less than dividends. - Given
3. c. the company must have sold stock.
4. d. net income is greater than dividends.
154. Stahl Consulting started the year with total assets of $20,000 and total liabilities of $5,000. During the year, the business recorded $16,000 in catering revenues and $10,000 in expenses. Stahl issued stock of $3,000 and paid dividends of $5,000 during the year. The net income reported by Stahl Consulting for the year was: ✖
1. a. $1,000.
2. b. $4,000. - Given
3. c. $6,000.
4. d. $9,000.
149. Misra Company compiled the following financial information as of December 31, 2013: Revenues $170,000 Retained earnings (1/1/13) 30,000 Equipment 40,000 Expenses 125,000 Cash 45,000 Dividends 10,000 Supplies 5,000 Accounts payable 20,000 Accounts receivable 35,000 Common stock 40,000 Misra’s assets on December 31, 2013 are ✔
1. a. $90,000.
2. b. $125,000. - Given
3. c. $180,000.
4. d $245,000.
170. The organization(s) primarily responsible for establishing generally accepted accounting principles is(are) the FASB SEC ✖
1. a. no no
2. b. yes no - Given
3. c. no yes
4. d. yes yes
136. Mofro’s Computer Repair Shop started the year with total assets of $270,000 and total liabilities of $180,000. During the year, the business recorded $450,000 in computer repair revenues, $270,000 in expenses, and Mofro paid dividends of $45,000. Stockholders' equity at the end of the year was ✖
1. a. $180,000.
2. b. $210,000. - Given
3. c. $225,000.
4. d. $270,000.
168. Auditing is ✖
1. a. the examination of financial statements by a CPA in order to express an opinion on their fairness.
2. b. a part of accounting that involves only recording of economic events.
3. c. an area of accounting that involves such activities as cost accounting, budgeting, and accounting information systems. - Given
4. d. conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly.
157. At October 1, Arcade Fire Enterprises reported stockholders' equity of $35,000. During October, no stock was issued and the company earned net income of $9,000. If stockholders' equity at October 31 totals $39,000, what amount of dividends were paid during the month? ✖
1. a. $0
2. b. $4,000 - Given
3. c. $5,000
4. d. $13,000
145. Centro-matic Company began the year with stockholders' equity of $15,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $21,000, recorded expenses of…