Test 1 Ch 1 t/f a
A cash dividend paid to stockholders is reported in the investing activities section of the statement of cash flows.
F
A cash dividend paid to stockholders is reported on the income statement.
F
Changes in retained earnings during the accounting period are reported on the income statement.
F
Consumers are the main providers of resources in any market.
F
Expenses are reported on the balance sheet.
F
Financial resources can be provided to a business by conversion agents.
F
Issuing common stock for cash increases retained earnings.
F
Liabilities are reported on the statement of cash flows of a business.
F
Making a payment on a bank loan is an example of an asset exchange transaction.
F
Purchasing equipment for cash is an example of an asset use transaction
F
Resource owners are the businesses that transform resources into products that satisfy consumer desires.
F
The accounting equation requires that liabilities be equal to equity.
F
The amount of net income for a period must equal retained earnings.
F
The issuance of stock to owners for cash would be an example of an asset exchange transaction.
F
The purchase of a truck decreases retained earnings.
F
A cash dividend paid to stockholders is reported on the statement of changes in stockholders' equity.
T
A dividend paid to stockholders decreases retained earnings.
T
An asset source transaction increases total assets and increases claims to assets.
T
Conversion agents purchase their resources from resource owners.
T
Labor resources include both the physical and intellectual labor of a business's employees.
T
Net income increases retained earnings.
T
Paying a dividend to stockholders is an example of an asset use transaction.
T
The acquisition of a bank loan increases both assets and liabilities.
T
The amount of a company's liabilities is equal to the difference between its assets and its equity.
T
The balance sheet reports the ending balances of permanent accounts as of the last day of the accounting period.
T
