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1

Retained earnings is:
A)Increased by net income and dividends
B)Increased by net income and decreased by dividends
C)Should not change after incorporation
D)Is an asset of a corporation
2

The adjusted trial balance shows retained earnings:
A)At the beginning of the period
B)At the end of the period
C)Not at all
D)Adjusted for net income
3

Dividends are:
A)Assets
B)Expenses
C)Liabilities
D)None of the above
4

Which accounts are temporary accounts and are closed at year-end?
A)Revenue
B)Expense
C)Dividends
D)All of the above
5

Which accounts will appear on an after-closing trial balance?
A)Unexpired insurance
B)Prepaid expenses
C)Retained earnings
D)All of the above
6

The current ratio equals:
A)Net income divided by total revenue
B)Current liabilities divided by current assets
C)Current assets divided by current liabilities
D)Current assets divided by total assets
7

Working capital equals:
A)Current assets minus current liabilities
B)Current assets plus current liabilities
C)Current assets times current liabilities
D)Current assets divided by current liabilities
8

Which of the following change the amount of capital stock reported on the balance sheet?
A)Dividends paid
B)Net income
C)Neither A or B
D)Both A and B
9

On which statement will dividends appear?
A)Income statement
B)Retained earnings statement
C)Balance sheet
D)All three statements
10

If the income summary account has a credit balance, that indicates:
A)There is a net loss
B)There is net income
C)Assets increased during the year
D)Assets decreased during the year





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