Post Accounting 2 - Chapter 1 Review

Which of the following are the three basic elements of the balance sheet?

• Assets, liabilities, and retained earnings.

• Assets, liabilities, and common stock.

• Assets, liabilities, and revenues.

• Assets, liabilities, and stockholders' equity.

At the end of last year, the company's assets totaled $430,000 and its liabilities totaled $370,000. What is the amount of stockholders' equity?

• $77,000

• $60,000

• $17,000

• $800,000

Expenses are reported on the:

• income statement in the time period in which they are paid.

• income statement in the time period in which they are incurred.

• balance sheet in the time period in which they are paid.

• balance sheet in the time period in which they are incurred.

If revenues are less than expenses, the company's Retained Earnings:

• decrease

• increase

• must be replenished by stockholders.

• are paid to stockholders.

The Publish or Perish Printing Company paid a dividend to stockholders. This will be reported on the:

• audit report.

• income statement.

• balance sheet.

• statement of retained earnings.

If Blair Industries had $24 million in revenue and net income of $6 million, then its:

• expenses must have been $30 million.

• expenses must have been $18 million.

• assets must have been $24 million.

• assets must have been $6 million.

If Boward Co. has Common Stock of $40,000, total assets of $85,000, and total liabilities of $35,000, its Retained Earnings equals:

• $10,000.

• $45,000.

• $50,000.

• $55,000.

Dividends are reported on the:

• income statement.

• balance sheet.

• statement of retained earnings.

• income statement and balance sheet.

Stockholders' equity is the difference between a company's assets and its liabilities.

• True

• False

A company owes $200,000 on a bank loan. It will be reported by the company as Accounts Payable.

• True

• False