Common stock has a _____ balance and is a/an _____ to the Corporation.
(A)debit; liability
(B)credit; liability
(C)debit; asset
(D)credit; asset
(E)credit; equity
Retained earnings are revenue of a corporation that is:
(A)Not paid out in dividends (B)Paid to shareholders (C)Considered gross profit (D)Shown in a trial balance (E)Issued in stock
Correct Answer: A
Bart's Brewskies saw sales of $50,000 in December-primarily due to New Year's Eve celebrations. Bart determined that 30% of his sales are paid in cash, while the rest are billed for their brewskies. Of the money owed, 40% is paid December, while the remaining is paid the following month. What is the increase of Accounts Receivable on New Year's Eve?
(A)$21,000 (B)$14,000 (C)$15,000 (D)$35,000 (E)$50,000
Correct Answer: A
Cartman's Cats had a total of 100,000 shares of common stock issued. In February, they reacquired 20,000 shares and did not retire them. How many shares of outstanding stock do they currently have? Mark one answer:
(A)100,000 (B)120,000 (C)20,000 (D)60,000 (E)80,000
Correct Answer: E
More CPA Exam Questions
- 1Jenny's Bakery recently delivered a bad batch of cakes to a local restaurant. Jenny quickly refunded the cost of the cakes to the restaurant. Her accountant made a _____ to her Refunds of Sales account for this transaction:
- 2One purpose of GAAP is to provide _____ between accounting periods.
- 3Cartman's Cats has $1,000,000 in assets after purchasing Big Bertha's Birds, along with $500,000 in liabilities. It has 500 shares capital stock outstanding. What is the book value of each share of stock? Mark one answer:
- 4Larry the Lawyer is going to represent Bart's Brewskies in an upcoming litigation. Bart is being sued for representing his brewskies as being non-alcoholic, when in fact, they were 80-proof. Larry has asked Bart for a retainer of $1,000 before he'll even meet with Bart. Assuming the accrual basis of accounting is in play, that $1,000 is considered (for Larry): Mark one answer:
- 5Common stock has a _____ balance and is a/an _____ to the Corporation.