It is Dives, Inc.'s first year of business. Dives' net income for its first year is 200,000. Dives declared and paid dividends of 50,000. The balance in retained earnings at the end of the first year equals:
A) 200,000.
B) 50,000.
C) 150,000.
D) 250,000.
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Q. 2) Strong antifraud controls include:
a. segregation of duties
b. job rotations
c. mandatory vacations
d. all of the above
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Q. 3) In February, Ira Roth, Public Accountant, accepted 500 in cash from a customer in exchange for a tax return he promised to prepare in April. Which of the following statements is true?
A) Ira has earned 500 in February.
B) Ira has a 500 liability in February.
C) Ira does not need to record anything in February. He can wait until April.
D) Ira has to record Cash of 500 in April when the return is prepared.
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Q. 4) A vendor offers terms of 3/10, n/30. What is the ANNUAL interest rate the vendor is charging a buyer who does not pay within 10 days? (Assume there are 360 days in the year.
A) 3
B) 36
C) 54
D) 108
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Q. 5) ____________________ are items that the bank adds to a depositor's account.
Fill in the blank(s) with correct word
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Q. 6) Assume 2011 is the company's first year of business. There were no dividends declared in 2011 and 100 of dividends declared in 2012.
For the year ended For the year ended
December 31, 2011 December 31, 2012
Revenues 300 2,500
Expenses (1,400)
Net Income 1. __
December 31, 2011 December 31, 2012
Assets 1,000 2,500
Liabilities ___ 2.
Contributed capital 300 300
Retained earnings ______________ 3. _____________
Determine the missing amounts, 1. Net income, 2. Liabilities of 200, and 3. Retained earnings of 1,400, in the condensed income statement and balance sheet for the year ended December 31, 2012.
A) 1. Net income of 1,100; 2. Liabilities of 200; 3. Retained earnings of 1,400
B) 1. Net income of 3,900; 2. Liabilities of 1,000; 3. Retained earnings of 1,300
C) 1. Net income of 1,100; 2. Liabilities of 1,000; 3. Retained earnings of 1,200
D) 1. Net income of 1,100; 2. Liabilities of 200; 3. Retained earnings of 1,200
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