B. Row, Inc. needed some long-term financing and arranged for a 10-year, 100,000, 7 mortgage loan on January 1, 2010. Annual payments of 14,238 will be made on December 31 each year. What effect will the payments have on the accounting equation?
A) Total assets, liabilities and shareholders' equity will all decrease.
B) Only total assets and total liabilities will decrease.
C) Only total assets and total shareholders' equity will decrease.
D) Total liabilities will increase and total shareholders' equity will decrease.
(
Q. 2) A discount offered as an inducement for prompt payment of an invoice is called a(n)
a. trade discount.
b. invoice discount.
c. early discount.
d. cash discount.
(
Q. 3) Each cash flow reported in the statement of cash flows relates to operating, investing, or financing activities.
Indicate whether the statement is true or false
(
Q. 4) When the allowance method for accounting for uncollectible receivables is used, net income is reduced when aspecific receivable is written off.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 5) Issuing a stock dividend ________.
A) decreases total shareholders' equity
B) does not increase any shareholder's percentage of ownership in the company
C) increases total shareholders' equity
D) decreases total assets
(
Q. 6) Having too many control plans directed at the same control goal is called:
a. control efficiency
b. control effectiveness
c. control redundancy
d. control completeness
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