Multiple Choice Answers

When the cumulative taxable income is higher than that reported on the financial statements, this gives rise to:
a. a deferred income tax liability
b.a deferred income tax asset
c.either of the above
d.neither of the above.
Which of the following statements is correct?
a. retained earnings does not represent a cash fund
b.A corporation can have a large cash balance but no retained earnings.
c. a corporation can have a balance in the Retained Earnings account but no cash.
d. all of these statements are correct.
The entry to record the declaration of cash dividend consists of a debit to _________and a credit to ____________.
a. Dividend Expense;Cash
b.Retained Earnings;CommonStock Dividend Distributable
c.Dividends Payable; Retained Earnings
d.Retained Earnings;Dividends Payable.
A decleration and distribution of a 20% stock dividend on common stock will:
a. not change the total stockholders equity
b.increase the assets of the corporation.
c.result in an increase in the book value of each share of common stock outstanding
d. increase the liabilities of the corporation
A corporation reported a net income of $90,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $30,000 was also distributed during the year. If the beginning balance of the Retained Earnings account was $140,000 the ending balance is
a. $230,000
b.$170,000
c.$140,000
d.$130,000

The Treasury Stock account is shown on the balance sheet as a(n):
a. asset
b. additional to the Common Stock and Preferred Stock accounts in the Stockholders Equity section.
c. deduction from the Retained Earnings in the Stockholders Equity section
d. deduction from the sum of all other items in the Stockholders Equity section.