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Date Submitted: 06/03/2012 06:32 PM

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Business/Accounting/Business Analysis/Financial Reporting

This homework question:

Marie Blaesing started her own consulting firm, Blaesing Consulting Inc.


I need help with the problems that are attached in the word doc.

Thanks in advance

Nature of problems:

1. If total liabilities increased by $5,000, then

a. assets must have decreased by $5,000.

b. stockholders' equity must have increased by $5,000.

c. assets must have increased by $5,000, or stockholders' equity must have decreased by $5,000.

d. assets and stockholders' equity each increased by $2,500.

2. The purchase of an asset on credit

increases assets and stockholders' equity.

increases assets and liabilities.

decreases assets and increases liabilities.

leaves total assets unchanged.

3. Receiving payment of a portion of Accounts Receivable will

a. not affect total assets.

b. increase liabilities.

c. increase stockholders' equity.

d. decrease net income.

4. Which statement about an account is true?

a. In its simplest form, an account consists of two parts.

b. An account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items.

c. There are separate account for specific assets and liabilities but only one account for stockholders' equity items.

d. The left side of an account is the credit or decrease side.

5. Which of the following describes the classification and normal balance of the

unearned revenue account?

a. Asset, debit

b. Liability, credit

c. Revenues, credit

d. Expense, debit

6. At September 1, 2007, Five-O Inc. reported Retained Earnings of $136,000. During the month, Five-O generated revenues of $20,000, incurred expenses of $12,000, purchased equipment for $5,000 and paid dividends of $2,000. What is the balance in Retained Earnings at September 31, 2007?

a. $136,000 debit

b. $8,000 credit

c. $137,000 credit

d. $142,000 credit