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Unformatted text preview: ----- ---~~---- --------------------------------- - -------- Accounting 284 - Chapter 3 Spring 2009 - 15 points - Take Home Name: .. ------------- l Dr. Clem Quiz 2 \ ,\X:±:.\~ \-\1)\'6'\ Class Time(circle): II am Multiple Choice Questions. letters. (3 pts each) ~ Row It> ~ 2 Write correct answer in space provided using capital LI. Ames Corporation had sales on account to their customers during the month. What was the effect ofthis transaction? A) assets increase; liabilities increase; net income increases C]J:> assets increase; stockholders' equity increases; net income increases C) assets decrease; liabilities decrease; net income decreases D) assets decrease; stockholders' equity decreases; net income increases h 2.' Which of the following would NOT result from paying wages to your employees for work they did during the current month? A) assets decrease B) retained earnings decreases C) stockholders' equity decreases expenses decrease ® /' A3. Which of the following expenses is usually listed first on the income 1~tement? W Cost of sales B) Salaries and benefits expense C) General administrative.expenses D) Income tax expense ~ 4. The principle which requires that costs incurred to generate revenues be recognized in the same period is the ,A2 revenue recognition principle. CJD) matching principle. C) measurement principle. D) cost principle. Ls. What would be the effect on December's income statement of a utility bill received on December 27, 2008 for utilities used in December but which will not be paid until January 10,2009'1 A) No expense will be recognized until the bill is paid in January We would cause an increase in income by recording the expense in December (9) Recording the expense in December when it is incurred will increase expenses D) Income will be decreased when we pay the bill in January JlJ... ...
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