Multiple-choice questions:
a. The balance sheet equation can be defined as which of the following?
1. Assets + Stockholders’ Equity = Liabilities
2. Assets + Liabilities = Stockholders’ Equity
3. Assets = Liabilities = Stockholders’ Equity
4. Assets – Liabilities = Stockholders’ Equity
5. None of the above
b. If assets are $40,000 and stockholders’ equity is $10,000, how much are liabilities?
1. $30,000
2. $50,000
3. $20,000
4. $60,000
5. $10,000
c. If assets are $100,000 and liabilities are $40,000, how much is stockholders’ equity?
1. $40,000
2. $50,000
3. $60,000
4. $30,000
5. $140,000
d. Which is a permanent account?
1. Revenue
2. Advertising Expense
3. Accounts Receivable
4. Dividends
5. Insurance Expense
e. Which is a temporary account?
1. Cash
2. Accounts Receivable
3. Insurance Expense
4. Accounts Payable
5. Notes Payable
f. In terms of debits and credits, which accounts have the same normal balances?
1. Dividends, retained earnings, liabilities
2. Capital stock, liabilities, expenses
3. Revenues, capital stock, expenses
4. Expenses, assets, dividends
5. Dividends, assets, liabilities