Accounting Final BA 315 OSU

Closing

The process of transferring information from the revenue, expense, and dividend accounts to the Retained Earnings account is called

Increase, Increase

Acquiring cash by issuing common stock will cause assets on the left side of the accounting equation to __ and common stock on the right side of the accounting equation to __.

assets and liabilities

When a business borrows cash from a creditor Blank______ increase.

sources of the company's assets

The amounts in liabilities, common stock, and retained earnings represent Blank______.

exchange

When one asset decreases and another asset increases, an asset __ transaction has occurred.

operating

Activities dealing with purchasing and selling short-term assets are Blank______ activities.

dividend

When a business transfers some or all of its earned assets to owners, the transfer is called a(n) __ .

Liabilities

In accounting terms, the obligations a business owes to its creditors are called __.

False

The amounts in liabilities, common stock, and retained earnings represent the amount of cash held by the company.

Purchasing a building with cash

Which of the following is an asset exchange transaction?

Paying employees

Paying expenses

Cash receipts from customers

Which of the following are operating activities?

and retained earnings to decrease

Paying a cash dividend will cause cash Blank______,

obligations to repay creditors

sources of assets

Liabilities may be defined as Blank______.

Paying Employees

Which of the following is an operating activity?

Stockholders may suffer sacrifices from business operations.

Operations is a source of assets.

Operations may result in a decrease in assets.

Which of the following statements are correct?

Paying dividends is an option, not a legal requirement.

Past earnings can be used to pay future dividends.

Which of the following statements are true?

A company can pay dividends to stockholders whether or not the company has retained earnings.

Paying dividends is an option, not a legal requirement.

The increase in a business's commitments to stockholders is called common stock.

Past earnings can be used to pay future dividends.

Accounting Equation

The relationship between a business's assets and the claims on its assets is frequently expressed in an equality called the __ equation.

False

All companies use the same number of accounts.

increase in an asset and an increase in liabilities or stockholders' equity

An asset source transaction causes a(n) Blank______.

and liabilities to increase

Borrowing money from creditors will cause cash Blank______.

Exchange

An event that does not affect the amount of total assets is called an asset __ transaction.

Operations is a source of assets.

Operations may result in a decrease in assets.

Stockholders may suffer sacrifices from business operations.

Which of the following statements are correct?

Operations is a source of assets.

Operations may result in a decrease in assets.

Dividends decrease earnings or increase losses.

Stockholders may suffer sacrifices from business operations.

and retained earnings to increase

Earning cash revenue by providing services to customers causes cash Blank______.

decrease total assets and total claims

All asset use transactions Blank______.

expense

The text defines __ as an economic sacrifice a business incurs in the process of generating revenue.

Historical Cost

Assets are normally shown on the company's books at Blank______.