1. If services are rendered for credit, then liabilities will decrease. equity will increase. liabilities will increase. assets will decrease. 2. The economic entity assumption requires that the activities of different entities can be combined if all the entities are corporations. of a sole proprietorship cannot be distinguished from the personal economic events of its owners. of an entity be kept separate from the activities of its owner. must be reported to the Securities and Exchange Commission. 3. The retained earnings section of the statement of financial position is determined by share capital, dividends and residual equity. revenues, expenses and dividends. assets,liabilities and share capital. revenues, expenses and share capital. 4. The Roy’s Downtown Diner received a bill of $400 from the Emeril Advertising Agency. The owner, Roy James, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is a decrease in Accounts Payable and an increase in Retained Earnings. an increase in Accounts Payable and a decrease in Retained Earnings. a decrease in Cash and an increase in Retained Earnings. a decrease in Cash and an increase in Accounts Payable. 5. Marilu Company began the year with equity of $225,000. During the year, Marilu issued additional ordinary shares in exchange for cash of $315,000, recorded expenses of $900,000, and paid dividends of $60,000. If Marilu’s ending equity was $690,000, what was the company’s revenue for the year? $1,425,000. $1,365,000. $1,110,000. $1,050,000. 6. Which of the following would not be considered internal users of accounting data for a company? The president of a company. The controller of a company. Creditors of a company. Salesmen of a company. 7. Gafisa Inc. performed services for R$390,000. The company collected R$130,000 in cash. The balance will be collected in 30 days. Performing services for R$390,000 will increase assets by R$130,000 and equity by R$260,000. liabilites and equity by R$390,000. assets and equity by R$390,000. assets by R$130,000, liablities by R$260,000 and equity by R$390,000. 8. Bumi Corporation purchased an investment in the ordinary shares of another corporation for Rp250,000,000 in 2015. The shares are actively traded on the Indonesian Stock Exchange. The fair value of the investment at December 31, 2017 is Rp268,000,000. If the company follows the fair value principle, the investment will be reported in the 2014 financial statement at Rp268,000,000 on the retained earnings statement. Rp250,000,000 on the retained earnings statement. Rp250,000,000 on the statement of financial position. Rp268,000,000 on the statement of financial position. 9. The assumption that enables accounting to quantify (measure) economic events is the monetary unit assumption. cost principle. historical cost principle. economic entity assumption. 10. Gunnie Inc., located in Texas, records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent? accounting period assumption going concern assumption monetary unit assumption economic entity assumption Loading … Question 1 of 10 Share this:Tweet Share on WhatsApp (Opens in new window) WhatsApp Share on Telegram (Opens in new window) Telegram
