Multiple Choice Questions based on business accounts.
1. BR, Incorporated, a corporation, pays $4,000 in dividends. This $4,000 payment will:
a.Increase the Cash account.
b.Increase the Dividends account.
c.Increase the Capital Stock account.
d.Decrease the Capital Stock account.
2. BR, Incorporated, a corporation, pays $4,000 in dividends. This $4,000 payment will be recorded as a:
a.Dividends: Credit; Cash: Debit
b.Dividends: Debit; Cash: Credit
c.Dividends: No effect; Cash: No effect
d.Dividends: Debit; Cash: No effect
3. BR, Incorporated, a corporation, has a $100,000 Capital Stock balance at the beginning of the year. Additional Common Stock of $45,000 was issued during the year. The Capital Stock balance at the end of the year is:
a.$ 145,000
b.$ 100,000
c.$ 55,000
d.$ 45,000
4. BR, Incorporated issued $100,000 in Capital Stock to each of its two shareholders. The Corporation paid Dividends of $20,000 during the year. The balance in the Capital Stock account at the end of the year is:
a.$ 220,000
b.$ 200,000
c.$ 120,000
d.$ 100,000
5. Carriage Company, Inc.'s Capital Stock balance was $38,000 on December 31, 2001. Additional stock of $13,000 was issued during the year. Carriage's Capital Stock balance on January 1, 2001 was:
a.$51,000
b,$38,000
c.$25,000
d.$13,000
6. StarCo, a newly formed corporation, paid its office rental for the month of April, 2001. What accounts are impacted by this transaction?
a.Debit Dividends; credit Capital Stock
b.Debit Rent Revenue; credit Cash
c.Debit Drawings; credit Capital Stock
d.Debit Rent Expense; credit Cash
7. StarCo, a newly formed corporation, purchased Inventory on account from a vendor. What accounts are impacted by this transaction?
a.Debit Inventory; credit Cash
b.Debit Inventory; credit Accounts Payable
c.Debit Drawings; credit Cash
d.Debit Drawings; credit Accounts Payable
8. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, Joe's Accounts Receivable account will increase by:
a.$ -0-
b.$ 80,000
c.$120,000
d.$200,000
9. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, Joe's Revenue account will increase by:
a.$ -0-
b.$ 80,000
c.$120,000
d.$200,000
10. The corporation, Joe's Discount Furniture, recorded sales for the month of May, 2001 amounting to $200,000. Sixty percent(60%) of these sales were on account. As a result of this transaction, how will the following accounts be impacted?
a.Cash: $ -0-; Capital Stock: $200,000 increase
b.Cash: $ 80,000 increase; Capital Stock: No effect
c.Cash: $120,000 increase; Capital Stock: No effect
d.Cash: $200,000 increase; Capital Stock: $200,000 increase