TRUE/FALSE. Write "T" if the statement is true
1) Financing activities are transactions involving external sources of funding.
2) Expense accounts increase with a debit and decrease with a credit.
3) Purchasing equipment using cash causes assets to increase.
4) Liability accounts increase with a debit and decrease with a credit.
5) Borrowing cash from the bank causes assets to increase and liabilities to increase.
6) Amounts owed to suppliers, employees, the government in the form of taxes, and utility companies are examples of liabilities.
7) If a company reports revenues of $17,000 and expenses of $12,000, then net income equals $5,000.
8) If total liabilities of a company equal $16,000 and total stockholders' equity equals $9,000, then total assets equal $7,000.
9) If total assets of a company equal $12,000 and total stockholders' equity equals $4,000, then total liabilities equal $8,000.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers question.
10) Revenues normally carry a ______ balance and are shown in the ______.
A) Credit; Income statement
B) Debit; Balance sheet
C) Credit; Balance sheet
D) Debit; Statement of stockholders' equity
11) When cash payments are made to stockholders, what is the effect on the company's accounts?
A) Cash increases and common stock increases.
B) Cash increases and dividends decrease.
C) Cash decreases and dividends increase.
D) Cash decreases and common stock decreases.
