Question

1.

Dividends would appear on

Select one:

a. Income Statement

b. Statement of Retained Earnings

c. Balance Sheet Statement

d. None of the above

2.

If assets increase $80,000 during a given period and liabilities increase $30,000 during the same period, stockholders' equity must have:::If assets increase $80,000 during a given period and liabilities increase $30,000 during the same period, stockholders' equity must have:

Select one:

a. decreased $50,000

b. decreased $40,000

c. increased $50,000

d. increased $30,000

3.

Salary expense would appear on

Select one:

a. Income Statement

b. Statement of Retained Earnings

c. Balance Sheet Statement

d. Statement of Cash Flows

Answer 1

Answer : - 1. b.Statement of Retained Earnings

Explanation :- Dividend is is an apportionment of profit. It is paid out from retained income and from current profit. Current profit is added to previous retained earnings balance and the dividend is paid from retained earnings.

Answer : - 2. c. Increase $50,000

Explanation :- Shareholder fund = Total Assets - Outside liabilities

So when Asset increases by $80,000 and liability Increases by $30,000 the difference of $ 50,000 is due to increase in shareholders Equity.

Answer : - 3. a. Income Statement

Explanation:- Salary expense is a income statement item. When is it not paid or paid in advance same will be shown in balance sheet as Salary unpaid and Salary prepaid. Salary expense is not a cash flow item. Salary when it is paid it is shown in cash flow statement.