How will the following accounts be impacted

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Reference no: EM1313973

Multiple Choice Questions based on business accounts.

1. BR, Incorporated, a corporation, pays $4,000 in dividends. This $4,000 payment will:

a.Increase the Cash account.

b.Increase the Dividends account.

c.Increase the Capital Stock account.

d.Decrease the Capital Stock account.

2. BR, Incorporated, a corporation, pays $4,000 in dividends. This $4,000 payment will be recorded as a:

a.Dividends: Credit; Cash: Debit

b.Dividends: Debit; Cash: Credit

c.Dividends: No effect; Cash: No effect

d.Dividends: Debit; Cash: No effect

3. BR, Incorporated, a corporation, has a $100,000 Capital Stock balance at the beginning of the year. Additional Common Stock of $45,000 was issued during the year. The Capital Stock balance at the end of the year is:

a.$ 145,000

b.$ 100,000

c.$ 55,000

d.$ 45,000

4. BR, Incorporated issued $100,000 in Capital Stock to each of its two shareholders. The Corporation paid Dividends of $20,000 during the year. The balance in the Capital Stock account at the end of the year is:

a.$ 220,000

b.$ 200,000

c.$ 120,000

d.$ 100,000

5. Carriage Company, Inc.'s Capital Stock balance was $38,000 on December 31, 2001. Additional stock of $13,000 was issued during the year. Carriage's Capital Stock balance on January 1, 2001 was:

a.$51,000

b,$38,000

c.$25,000

d.$13,000

6. StarCo, a newly formed corporation, paid its office rental for the month of April, 2001. What accounts are impacted by this transaction?

a.Debit Dividends; credit Capital Stock

b.Debit Rent Revenue; credit Cash

c.Debit Drawings; credit Capital Stock

d.Debit Rent Expense; credit Cash

7. StarCo, a newly formed corporation, purchased Inventory on account from a vendor. What accounts are impacted by this transaction?

a.Debit Inventory; credit Cash

b.Debit Inventory; credit Accounts Payable

c.Debit Drawings; credit Cash

d.Debit Drawings; credit Accounts Payable

8. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, Joe's Accounts Receivable account will increase by:

a.$ -0-

b.$ 80,000

c.$120,000

d.$200,000

9. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, Joe's Revenue account will increase by:

a.$ -0-

b.$ 80,000

c.$120,000

d.$200,000

10. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, how will the following accounts be impacted?

a.Cash: $ -0-; Capital Stock: $200,000 increase

b.Cash: $ 80,000 increase; Capital Stock: No effect

c.Cash: $120,000 increase; Capital Stock: No effect

d.Cash: $200,000 increase; Capital Stock: $200,000 increase

Reference no: EM1313973

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