Reference no: EM132671843

Problem 1) Which of the following economic events would be captured by an accrual accounting system, but not by a cash accounting system?

Option 1: Payment of dividends to shareholders.

Option 2: None of the others alternatives are correct

Option 3: Payment of an amount owing on a previous purchase.

Option 4: Receipt of payment for a previous sale made on credit.

Option 5: Use of a previously purchased motor vehicle for company business.

Problem 2) Which of these liabilities would be accounted for at the present value of future cash payments?

Option 1: Income taxes payable

Option 2: Accounts payable

Option 3: Withholding taxes payable

Option 4: None of the others alternatives are correct

Option 5: Bonds payable

Problem 3) Payment of a liability would do which of the following?

Option 1: Decrease Shareholders Equity

Option 2: Not affect Assets

Option 3: Decrease Assets

Option 4: Increase Assets

Option 5: None of the above

Problem 4) Which of the following transactions will cause both the left and right side of the balance sheet equation to increase?

Option 1: None of the above

Option 2: We collect cash from a customer who owed us money.

Option 3: We pay a supplier for inventory we previously bought on account.

Option 4: We borrow money from the bank.

Option 5: We purchase equipment for cash.

Problem 5) The following transaction occurred during the first month of operations, indicate what's the effect on the accounting equation: Fourth event organized and delivered. Provided one of the activities of a corporate team building extravaganza weekend. The contract signed says the payment will be effective in 30 days with a cheque for $2,000

Option 1: Decrease assets and decrease liabilities

Option 2: Increase assets and increase liabilities

Option 3: Increase assets and increase Owner's equity

Option 4: Increase and decrease assets

Option 5: None of the others alternatives are correct