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When capital is increased in the double-entry method of accounting, the result is: Mark one answer:

(A)A credit

(B)A debit

(C)It is dependent on the situation

(D)There is not enough information to determine the answer.

(E)None of the above

King, CPA, was engaged to audit the financial statements of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors, but was satisfied concerning both after applying alternative procedures.King’s auditor’s report most likely contained a(n)

(A)Qualified opinion (B)Disclaimer of opinion. (C)Unmodified opinion. (D)Unmodified opinion with an other-matter paragraph.

Correct Answer: C

Which of the following is subtracted from net sales to determine gross profit?

(A)Mark one answer: (B)Cost of goods sold (C)Expenses (D)Both cost of goods sold and expenses (E)Cost of goods sold, expenses, and taxes (F)Taxes

Correct Answer: A

Which of the following transactions have a negative impact on cash? Mark one answer:

(A)A decrease in supplies on hand (B)Proceeds from selling equipment used in the business (C)A loss on selling equipment used in the business (D)Dividends declared and paid (E)An increase in income taxes payable

Correct Answer: D