Distinct entity from the owners

Assignment Help Financial Accounting

Reference no: EM1313969

Multiple choice questions based on business accounts.

1. Which organizational form allows the business to be a separate, distinct entity from the owners?

a.Proprietorship

b.Partnership

c.Corporation

d.All of the above

2. The Retained Earnings account is unique to which of the following forms of business organization?

a.Partnership

b.Proprietorship

c.Corporation

d.A Retained Earnings account is used in all of the above choices.

3. The issuance of a cash dividend:

a.Increases a corporation's retained earnings balance.

b.Decreases the value of outstanding stock.

c.Increases the number of shares of outstanding stock.

d.Decreases a corporation's retained earnings balance.

4. Which of the following is true of a corporation's Retained Earnings account?

a.It usually equals cash on hand.

b.It includes all of the Corporation's Liabilities.

c.It includes the transfer of dividends declared during the period.

d.It is shown as a section of the corporation's income statement.

5. A corporation issuing only one class of stock will usually title it:

a.Common Stock

b.Treasury Stock

c.No-par Stock

d.Preferred Stock

6. Bob and Ray recently purchased shares of BR, Incorporated, a corporation, for $100,000 each. This transaction will consist of the following entries to BR, Incorporated's records:

a.Debit Accounts Receivable; credit Capital Stock

b.Debit Cash; credit Accounts Payable

c.Debit Cash; credit Capital Stock

d.Debit Accounts Receivable; credit Accounts Payable

7. Bob and Ray organized BR, Incorporated, a corporation for which they are the only stockholders. At the end of the first year of operations, they elect to withdraw dividends in the amount of $2,000 each. This transaction will consist of the following entries on BR Incorporated's records:

a.Debit Drawing; credit Cash

a.Debit Wages Expense; credit Cash

b.Debit Capital Stock; credit Cash

c.Debit Dividends; credit Cash

8. Bob and Ray have just purchased shares of BR, Incorporated, a corporation, for $100,000 each. This transaction will impact the corporation's Stockholders' Equity by what amount?

a.$ -0-

b.$ 100,000

c.$ 200,000

d.Some other amount.

9. Which of the following properly reflects the transaction to record a Corporation's issuance of stock?

a.Capital Stock: Credit; Cash: Debit

b.Capital Stock: Debit; Cash: Debit

c.Capital Stock: Credit; Cash: Credit

d.Capital Stock: Debit; Cash: Credit

10. Which of the following properly reflects a Corporation's issuance of stock on the Capital Stock and Dividends accounts?

a.Capital Stock: Increases; Dividends: Decreases

b.Capital Stock: Increases; Dividends: No effect

c.Capital Stock: No effect; Dividends: Increases

d.Capital Stock: Decreases; Dividends: Increases

Reference no: EM1313969

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