1. The debt created by business when it makes purchase on account is referred to as:
a. Accounts payable
b. Accounts receivable
c. Asset
d. Expense payable
2. Retained Earnings represents:
a. Amount invested in the entity by owners.
b. Cash that is available for dividends
c. Cumulative net income that has not been distributed to owners as dividends.
d. Par value of common stock outstanding
3. The balance sheet comprises the following accounts except:
a. Goodwill
b. Accounts Payable
c. Cash
d. Cost of Goods Sold
4. Return on investment measure of performance:
a. Is not as important measure of management effectiveness as amount of net income?
b. Relates dividends paid to entity's assets.
c. Is calculated using net income as amount of return?
d. Is calculated by dividing average assets for a period by amount of net income for period.