Question

1. Which of the following events is not recorded in a company’s accounting records? a) Issuing...

1. Which of the following events is not recorded in a company’s accounting records?

a) Issuing a note in exchange for cash.

b) Performs services for a customer on account.

c) A collection of cash in advance from a customer.

d) Discussing with a customer the services a company offers.

e) The owner withdraws cash for personal use.

2. Paying a dividend

a)decreases assets and stockholders’ equity.

b)decreases liabilities and increases stockholders’ equity.

c) increases stockholders’ equity and decreases stockholders' equity by equal amounts.

d) increases assets and stockholders’ equity.

e) decreases assets and liabilities.

Business   Accounting   
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Answer #1

1. Option d is correct i. e.. Discussing with a customer the services a company offers, as companies any of the resources / obligation / expense / revenue are not affecting, if there is a increase or decrease in any of previously mentioned events, then transactions are recorded.

2. Option a is correct i. e.. decreases assets and stockholders’ equity, as in paying dividend cash which is a assets outflow i. e. decrease and also the dividend is paid out of profits which is the equity of the share holder so. the effect will be same i.e.. decrease of equity.

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