UNH ADMN 502 Berube Exam 2023 with complete
solution
When a company buys equipment for $150,000 and pays for one third in cash and the
other two thirds is financed by a note payable, which of the following are the effects on
the accounting equation?
A) Total assets increase $100,000.
B) Total liabilities decrease $50,000.
C) Total liabilities increase $150,000.
D) Total assets increase $150,000.
A) Total assets increase $100,000.
Which of the following transactions affects both retained earnings and net income?
A) The issuance of stock in exchange for cash.
B) The recording of revenue for services provided.
C) The borrowing of money from a bank.
D) The payment of a cash dividend.
B) The recording of revenue for services provided.
Which of the following best describes the purpose of an audit?
A) To establish that a corporation's stock is a sound investment.
B) To audit every transaction that an entity entered into.
C) To lend credibility to an entity's financial statements.
D) To prove the accuracy of an entity's financial statements.
C) To lend credibility to an entity's financial statements.
On January 1, 2016, Miller Corporation had retained earnings of $8,000,000. During
2016, Miller reported net income of $1,500,000, declared dividends of $500,000, and
issued common stock for $1,000,000. What were Miller's retained earnings on
December 31, 2016?
A) $9,500,000.
B) $7,000,000.
C) $7,500,000.
D) $9,000,000.
D) $9,000,000.
Which of the following has primary responsibility to develop Generally Accepted
Accounting Principles?
A) Financial Accounting Standards Board.
B) Securities and Exchange Commission.
C) Company Executives.
D) Public Company Accounting Oversight Board.
A) Financial Accounting Standards Board.
What is the minimum number of accounts that must be involved in any transaction?
A) One
B) Three
C) Two
D) There is no minimum.
C) Two
, Which of the following is not reported as a liability on a balance sheet?
A) Dividends payable.
B) Common stock.
C) Income taxes payable.
D) Accounts payable.
B) Common stock.
Which of the following journal entries is correct when a business entity pays cash for
advertising to be used next year?
A) Ad Expense
Cash
B)Prepaid Ad Expense
Cash
C) Cash
Prepaid Advertising Expense
D) Cash
Advertising Expense
B)Prepaid Ad Expense
Cash
Alpha Company issued 1,000 shares of $10 par value common stock to stockholders, in
exchange for $15,000 cash. Which of the following correctly describes the impact of this
transaction on Alpha's financial statements?
A) Common stock is reported at $15,000 in stockholders' equity.
B) Stockholders have invested $25,000 as stockholders' equity.
C) Additional paid-in capital of $5,000 is reported in stockholders' equity.
D) A $15,000 investment is reported as a long-term investment.
C) Additional paid-in capital of $5,000 is reported in stockholders' equity.
Which of the following reflects the impact of a transaction where $200,000 cash was
invested by stockholders in exchange for stock?
A) Assets and retained earnings each increased $200,000.
B) Assets and revenues each increased $200,000.
C) Stockholders' equity and assets each increased $200,000.
D) Stockholders' equity and revenues each increased $200,000.
C) Stockholders' equity and assets each increased $200,000.
Cash had a beginning balance of $68,900. During the month, Cash was credited for
$16,000 and debited for $18,300. At the end of the month, the balance is:
A) $66,600 credit.
B) $66,600 debit.
C) $71,200 debit.
D) $71,200 credit.
C) $71,200 debit.
Which of the following best describes the balance sheet?
A) It includes a listing of assets, liabilities, and stockholders' equity at their market
values.
B) It provides information pertaining to a company's liabilities for a period of time.
C) It provides information pertaining to a company's assets and the claims against
solution
When a company buys equipment for $150,000 and pays for one third in cash and the
other two thirds is financed by a note payable, which of the following are the effects on
the accounting equation?
A) Total assets increase $100,000.
B) Total liabilities decrease $50,000.
C) Total liabilities increase $150,000.
D) Total assets increase $150,000.
A) Total assets increase $100,000.
Which of the following transactions affects both retained earnings and net income?
A) The issuance of stock in exchange for cash.
B) The recording of revenue for services provided.
C) The borrowing of money from a bank.
D) The payment of a cash dividend.
B) The recording of revenue for services provided.
Which of the following best describes the purpose of an audit?
A) To establish that a corporation's stock is a sound investment.
B) To audit every transaction that an entity entered into.
C) To lend credibility to an entity's financial statements.
D) To prove the accuracy of an entity's financial statements.
C) To lend credibility to an entity's financial statements.
On January 1, 2016, Miller Corporation had retained earnings of $8,000,000. During
2016, Miller reported net income of $1,500,000, declared dividends of $500,000, and
issued common stock for $1,000,000. What were Miller's retained earnings on
December 31, 2016?
A) $9,500,000.
B) $7,000,000.
C) $7,500,000.
D) $9,000,000.
D) $9,000,000.
Which of the following has primary responsibility to develop Generally Accepted
Accounting Principles?
A) Financial Accounting Standards Board.
B) Securities and Exchange Commission.
C) Company Executives.
D) Public Company Accounting Oversight Board.
A) Financial Accounting Standards Board.
What is the minimum number of accounts that must be involved in any transaction?
A) One
B) Three
C) Two
D) There is no minimum.
C) Two
, Which of the following is not reported as a liability on a balance sheet?
A) Dividends payable.
B) Common stock.
C) Income taxes payable.
D) Accounts payable.
B) Common stock.
Which of the following journal entries is correct when a business entity pays cash for
advertising to be used next year?
A) Ad Expense
Cash
B)Prepaid Ad Expense
Cash
C) Cash
Prepaid Advertising Expense
D) Cash
Advertising Expense
B)Prepaid Ad Expense
Cash
Alpha Company issued 1,000 shares of $10 par value common stock to stockholders, in
exchange for $15,000 cash. Which of the following correctly describes the impact of this
transaction on Alpha's financial statements?
A) Common stock is reported at $15,000 in stockholders' equity.
B) Stockholders have invested $25,000 as stockholders' equity.
C) Additional paid-in capital of $5,000 is reported in stockholders' equity.
D) A $15,000 investment is reported as a long-term investment.
C) Additional paid-in capital of $5,000 is reported in stockholders' equity.
Which of the following reflects the impact of a transaction where $200,000 cash was
invested by stockholders in exchange for stock?
A) Assets and retained earnings each increased $200,000.
B) Assets and revenues each increased $200,000.
C) Stockholders' equity and assets each increased $200,000.
D) Stockholders' equity and revenues each increased $200,000.
C) Stockholders' equity and assets each increased $200,000.
Cash had a beginning balance of $68,900. During the month, Cash was credited for
$16,000 and debited for $18,300. At the end of the month, the balance is:
A) $66,600 credit.
B) $66,600 debit.
C) $71,200 debit.
D) $71,200 credit.
C) $71,200 debit.
Which of the following best describes the balance sheet?
A) It includes a listing of assets, liabilities, and stockholders' equity at their market
values.
B) It provides information pertaining to a company's liabilities for a period of time.
C) It provides information pertaining to a company's assets and the claims against
