QUESTION 13

What is the difference between dividends that are declared and dividends that are paid?

1. There is no difference
2. When they are declared they reduce Net Income and when they are paid they reduce cash
3. When they are declared they increase Net Income and when they are paid they reduce cash
4. When they are declared they reduce Common Stock and when they are paid they increase Dividends Payable
5. When they are declared they reduce Retained Earnings and when they are paid they reduce Dividends Payable

QUESTION 14

What does the term "net book value" mean?

1. The beginning balance that the firm uses when it disposes of an asset or liability
2. The ending balance of an asset or liability that is used for tax reporting purposes
3. The ending balance of an asset or liability after deducting the ending balance of its related contra account(s)
4. All of the above
5. None of the above

QUESTION 15

What is the difference between Bad Debt Expense and Receivable Write-off?

1. Bad Debt Expense reduces Accounts Receivable and Receivable Write-off reduces NI
2. Bad Debt Expense reduces NI and Receivable Write-off raises NI
3. Bad Debt Expense reduces the allowance account and Receivable Write-off does not change it
4. Bad Debt Expense raises the allowance account and Receivable Write-off reduces it
5. There is no difference

5 points

QUESTION 16

Which of the following is an asset?

1. Accounts receivable
2. Allowance for doubtful accounts
3. Accumulated depreciation
4. Patents
5. All of the above