FAR — Financial Accounting & Reporting — Quiz 65

Questions in this quiz (10)

1. Which account is debited when a stock dividend is issued?

   • Retained earnings
   • Cash
   • Revenue
   • Treasury stock

2. Which account is credited when shares are issued as a stock dividend?

   • Cash
   • Common stock
   • Revenue
   • Accounts payable

3. Which of the following best describes a stock split?

   • Distribution of cash dividends
   • Increase in number of shares with reduced par value
   • Repurchase of shares
   • Issuance of bonds

4. What effect does a stock split have on total stockholders' equity?

   • Increases equity
   • Decreases equity
   • No effect on total equity
   • Eliminates retained earnings

5. Which account is affected when dividends are declared but not paid?

   • Dividends payable
   • Cash
   • Revenue
   • Accounts receivable

6. Which financial statement shows dividend distributions?

   • Income statement
   • Balance sheet
   • Statement of retained earnings
   • Statement of cash flows

7. Which transaction reduces retained earnings?

   • Net income
   • Dividend declaration
   • Stock issuance
   • Revenue increase

8. Which financial statement presents assets, liabilities, and equity?

   • Income statement
   • Balance sheet
   • Statement of retained earnings
   • Statement of cash flows

9. Which formula represents the accounting equation?

   • Assets = Liabilities + Equity
   • Revenue − Expenses = Assets
   • Assets − Liabilities = Revenue
   • Equity = Revenue − Expenses

10. Which ratio measures profitability relative to sales?

    • Profit margin ratio
    • Current ratio
    • Debt ratio
    • Asset turnover