Financial Accounting, 8th Edition
8th Edition
ISBN: 9780078025556
Author: Robert Libby, Patricia Libby, Daniel Short
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 1, Problem 4MCQ
Which of the following regarding
- a. Retained earnings is increased by net income and decreased by a net loss.
- b. Retained earnings is a component of stockholders’ equity on the balance sheet.
- c. Retained earnings is an asset on the balance sheet.
- d. Retained earnings represents earnings not distributed to stockholders in the form of dividends.
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Which of the following regarding retained earnings is false?a. Retained earnings is increased by net income.b. Retained earnings is a component of stockholders’equity on the balance sheet.c. Retained earnings is an asset on the balance sheet.d. Retained earnings represents earnings not distributed tostockholders in the form of dividends
Which of the following statements concerning retained earnings is true?a. Retained earnings is the difference between revenues and expenses.b. Retained earnings is increased by dividends and decreased by net income.c. Retained earnings represents accumulation of the income that has not been distributed as dividends.d. Retained earnings is reported as a liability on the balance sheet.
Which of the following does not decrease retained earnings?
Select one:
a. Stock dividends
b. Cash dividends
c. Net loss
d. Net income
Chapter 1 Solutions
Financial Accounting, 8th Edition
Ch. 1 - Define accounting.Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Complete the following: Name of Statement...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the income statement,...Ch. 1 - Explain why the income statement and the statement...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Explain the equation for the income statement....Ch. 1 - Explain the equation for the balance sheet. Define...Ch. 1 - Explain the equation for the statement of cash...Ch. 1 - Explain the equation for retained earnings....Ch. 1 - The financial statements discussed in this chapter...Ch. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - (Supplement A) Briefly differentiate between a...Ch. 1 - Prob. 20QCh. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Which of the following regarding retained earnings...Ch. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Which of the following is true regarding the...Ch. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Matching Elements with Financial Statements M1-1...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Prob. 3MECh. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Focus on Cash Flows: Matching Cash Flow Statement...Ch. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 1APCh. 1 - Prob. 2APCh. 1 - Prob. 3APCh. 1 - Prob. 1CPCh. 1 - Prob. 2CPCh. 1 - Prob. 3CPCh. 1 - Prob. 4CPCh. 1 - Prob. 5CPCh. 1 - Prob. 6CPCh. 1 - Prob. 7CPCh. 1 - Prob. 1CC
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- What is the impact on the accounting equation when stock is issued, in exchange for assets? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changesarrow_forwardRetained earnings is accurately described by all except which of the following statements? A. Retained earnings is the primary component of a companys earned capital. B. Dividends declared are added to retained earnings. C. Net income is added to retained earnings. D. Net losses are accumulated in the retained earnings account.arrow_forwardHow are unusual or infrequent gains or losses reported on a company's income statement?arrow_forward
- Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.arrow_forwardWhich of the following is not a way to manage earnings? A. Change the method for bad debt estimation. B. Change the figure for the uncollectible percentage. C. Under the balance sheet aging method, change the past-due categories. D. Change the dates of common stock issuance.arrow_forwardWhich of the following is true about earnings management? A. It works within the constraints of GAAP. B. It works outside the constraints of GAAP. C. It tries to improve stakeholders views of the companys financial position. D. Both B and C E. Both A and Carrow_forward
- What are the distinctive features of ToyJoys income statement? Its statement of retained earnings? Its balance sheet?arrow_forwardEarnings that are not paid as dividends to stockholders and have cumulative amount are classified as A. non-paid earnings B. common earnings C. retained earnings D. preferredearningsarrow_forward1. Which of the following is not a component of shareholders' equity? a.Loss on sale of equipment b.Dividends payable c.Retained earnings d.Net incomearrow_forward
- Dividends are sometimes said to have been paid “out of retained earnings.” What is the error, if any, in that statement?arrow_forwardIf the revenues are correctly reported and the gross profit of a company is understated, what is the effect on stockholders' equity?  a. understated b. correctly stated c. overstated d. None of these choices are correct.arrow_forwardWhich statement regarding dividends is false?a. Dividends represent a sharing of corporate profits withowners.b. Both stock and cash dividends reduce retained earnings.c. Cash dividends paid to stockholders reduce net income.d. None of the above statements are false.arrow_forward
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