Accounting Final

A corporation's total stockholders' equity is increased by

• receiving payment on account

• declaring dividends

• paying dividends

• net income

Calculating an accurate inventory cost to assure that gross profit and net income are reported correctly on the income statement is an application of the accounting concept

• Perpetual Inventory

• Business Entity

• Consistent Reporting

• Adequate Disclosure

An expense that is paid in advance is recorded as an asset until the expense is incurred.

• True

• False

If merchandise inventory decreases from the beginning to the end of the fiscal period, the adjusting entry includes a debit to Income Summary

• True

• False

Land and anything attached to the land is called ______ property

• real

• asset

• intangible

• land

After adjustments at the end of a fiscal, the balance in Prepaid Rent represents the amount of rent expense for the current fiscal period.

• True

• False

The decrease in equity that results when a plant asset is sold for less than book value is

• Loss on plant assets

• Gain on plant assets

• plant asset depreciation

Stock records do not reflect

• the balance on hand after each increase of decrease is recorded

• increases in quantity on hand

• the cost of merchandise

• decreases in the quantity on hand

The closing entry for the Dividends account includes a credit to

• capital stock

• dividends

• income summary

• retained earnings

Companies that use a product's UPC code and a point-of-sale terminal

• eliminate the need of a physical inventory

• are assured of totally accurate inventory records at all time

• should still take a physical inventory at least once each fiscal year

• none of these