Questions from Financial Accounting

Q: A company has net income of $225,000 and declares

A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. What is the net impact on retained earnings? a. Increase of $225,000 c. Increase of $150,000 b. Decre...

Q: Which statement regarding dividends is false? a. Dividends represent

Which statement regarding dividends is false? a. Dividends represent a distribution of corporate profits to owners. b. Both stock and cash dividends reduce retained earnings. c. Cash dividends paid to...

Q: When treasury stock is purchased with cash, what is the impact

When treasury stock is purchased with cash, what is the impact on the balance sheet equation? a. No change: The reduction of the asset cash is offset with the addition of the asset treasury stock. b....

Q: Dollar General Corporation operates general merchandise stores that feature quality merchandise at

Dollar General Corporation operates general merchandise stores that feature quality merchandise at low prices. All stores are located in the United States, predominantly in small towns in 24 mid weste...

Q: Conceptually, does a 2-for-1 stock dividend immediately

Conceptually, does a 2-for-1 stock dividend immediately increase an investor’s personal wealth? a. No, because the stock price per share drops by half when the number of shares doubles. b. Yes, becaus...

Q: Your parents have just retired and have asked you for some financial

Your parents have just retired and have asked you for some financial advice. They have decided to invest $100,000 in a company very similar to Whole Foods. The company has issued both common and prefe...

Q: In what order do the three sections of the statement of cash

In what order do the three sections of the statement of cash flows usually appear when reading from top to bottom? a. Financing, Investing, Operating c. Operating, Financing, Investing b. Investing...

Q: Total cash inflow in the operating section of the statement of cash

Total cash inflow in the operating section of the statement of cash flows should include which of the following? a. Cash received from customers at the point of sale. b. Cash collections from customer...

Q: If the balance in prepaid expenses has increased during the year,

If the balance in prepaid expenses has increased during the year, what action should be taken on the statement of cash flows when following the indirect method, and why? a. The change in the account b...

Q: Consider the following: Net income = $10,000,

Consider the following: Net income = $10,000, depreciation expense = $2,000, accounts receivable increased by $800, inventory decreased by $100, and accounts payable increased by $500. Based on this i...