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What will be the affect of dividends paid on the book

1. What will be the affect of dividends paid on the book value of a company?a. Increaseb. Decreasec. No effectd. Depends upon the situation2. Which one of the following represents the value of shares in the market at any point oftime?a. Par valueb. Book valuec. Face valued. Market value3. Which of the following is TRUE regarding the entry to recognize the depreciationexpenses?a. It is an application of matching principleb. It is a closing entryc. Usually includes an offsetting credit either to cash or accounts payabled. It is done every month4. Retained earnings will change over time because of several factors. Which of thefollowing factors would explain an increase in retained earnings?a. Net lossb. Net incomec. Dividendsd. Investments by stockholders5. Equipment costing Rs. 3,000 with accumulated depreciation of Rs. 2,125 is exchangedfor another asset with a fair value of Rs. 625. The exchange has commercial substance.How much is the gain or loss on this transaction?a. A gain of Rs. 250 should be recognizedb. A loss of Rs. 250 should be recognizedc. A loss of Rs. 500 should be recognizedd. No gain or loss should be recognized.6. Which of the following is the proper journal entry to record Ransom Company’s billingof clients for Rs. 500 of services rendered?a. Debit Cash 500; Credit Accounts Receivable 500b. Debit Accounts Receivable 500; Service Revenue 500c. Debit Accounts Receivable 500; Credit Capital Stock 500d. Cash 500; Credit Service Revenue 5007. Which one of the following is NOT the commonly used technique for analysis offinancial statements?a. Horizontal analysisb. Vertical analysisc. Ratio analysisd. Technical analysis8. How would the sale of merchandise on account be represented in the seller’s records?a. Increase assets and increase expensesb. Increase assets and decrease liabilitiesc. Increase assets and increase paid-in capitald. Increase assets and decrease revenues9. Failure to record the receipt of a utility bill for services already received will resultinwhich of the following?a. An overstatement of assetsb. An overstatement of liabilitiesc. An overstatement of equityd. An understatement of assets10. When dividends are declared by a corporation’s board of directors, what will beitsjournal entry made on the declaration date?a. Debit Dividends payable; Credit Retained Earningsb. Debit Retained Earnings; Credit Cashc. Debit Retained Earnings; Credit Dividends Payabled. Debit Cash; Credit Retained Earnings

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