The accounts that represent resources owed to creditors are called

31. The accounts that represent resources owed to creditors are called:
A. Assets.
B. Liabilities.
C. Dividends.
D. Stockholders' equity.

 

32. Using the information below from the accounting records of Thomas Corporation, owners' claims to the company's resources amount to: 

A. $1,200,000.
B. $800,000.
C. $250,000.
D. $400,000.

Owners' claims (Stockholders' Equity) = Assets ($1,200,000) - Liabilities ($800,000)

33. Which of the following is an operating activity? 

A. Issuing common stock.
B. Paying dividends.
C. Borrowing cash from a bank to acquire a factory.
D. Paying electricity bills for the month.

 

34. How many of the following transactions are operating activities?

Borrowed $50,000 from the bank
Purchased $12,000 in supplies
Provide services to customers for $27,000
Paid the utility bill of $750
Purchased a delivery truck for $12,000
Received $25,000 from issuing common stock

A. One.
B. Two.
C. Three.
D. Four.

(1) Purchased supplies, (2) Provided services to customers, and (3) Paid utility bill.

 

35. The costs associated with producing revenues are referred to as: 

A. Dividends.
B. Assets.
C. Liabilities.
D. Expenses.

 

36. Accountants are responsible for measuring various operating, investing and financing activities. Which of the following correctly matches the activity with its type? 

A. Investing - paying utilities for the month.
B. Investing - purchasing land.
C. Operating - paying dividends to stockholders.
D. Financing - selling equipment for cash.

 

37. Which of the following accounts appears in the statement of stockholders' equity? 

A. Supplies.
B. Cash.
C. Salaries Payable.
D. Retained Earnings.

38. Sooner Company has had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last four years is $3,000, what is the ending retained earnings balance? 

A. $47,000.
B. $35,000.
C. $23,000.
D. $7,000.

Beginning Retained Earnings ($0) + Net Income ($8,000 + $5,000 + $12,000 + $10,000) - Dividends ($3,000 * 4) = Ending Retained Earnings.