Question

In: Accounting

Which of the following would not represent a financing activity? Paying dividends to stockholders. An investment...

  1. Which of the following would not represent a financing activity?
    1. Paying dividends to stockholders.
    2. An investment of capital by the owners.
    3. Borrowing money from a bank to purchase new equipment.
    4. Buying supplies.
  1. The obligations and debts of a business are referred to as:
    1. equities.
    2. assets.
    3. dividends.
    4. liabilities.
  1. Which of the following financial statements shows how net income (loss) and dividends impacted a stockholders' equity account?
    1. Statement of Retained Earnings
    2. Balance Sheet
    3. Statement of Cash Flows
    4. Income Statement
  1. Golden Enterprises started the year with the following: Assets $50,000; Liabilities $15,000; Common Stock $30,000; Retained Earnings $5,000. During the year, the company earned revenue of $2,500, all of which was received in cash, and incurred expenses of $1,500, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $500 to owners. Assume no other activities occurred during the year.

What was the amount of Golden's net income for the year?

  1. $1,000
  2. $500
  3. $1,500
  4. $2,500

Solutions

Expert Solution

1
Buying supplies would not represent a financing activity
Buying supplies is an operating activity
Option D is correct
2
The obligations and debts of a business are referred to as liabilities.
Option D is correct
3
Statement of Retained Earnings shows how net income (loss) and dividends impacted a stockholders' equity account.
Option A is correct
4
Net income for the year = Revenue-Expenses = 2500-1500 = $1,000
Option A is correct

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