1) Using check marks, identify the financial statement(s) on which each of the following items / accounts appear.

Item	Income Statement	Shareholders Equity	Balance Sheet
			Asset	Liability	Shareholder Equity
Sales Revenue
Unearned Revenue
Notes Payable
Retained Earnings
Accounts Receivable
Income Tax Expense
Pre-paid Rent
Land
Cash
Dividends

2) Circle the one correct answer for each of the following two statements:

At the end of Celebrity Imports first year of operations, assets are $750,000 and owners' equity is $680,000.

a. The business liabilities are $70,000.

b. The owner must have invested $750,000 to start the business.

c. The business liabilities are $1,430,000.

d. The business must be operating profitably.

A company pays back $1 million on a loan it had received earlier from a bank,

a. Assets are unchanged, liabilities and stockholders' equity both increased by $1 million.

b. Assets are unchanged, liabilities increase by $1 million, contributed capital decreases by $1 million.

c. Assets decrease by $1 million, liabilities are unchanged, contributed capital decreases by $1 million.

d. Assets decrease by $1 million, liabilities decrease by $1 million, stockholders' equity is unchanged.