Professional Documents
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If total revenue, total expenses and dividends declared increased by $40 000, $15
000 and $10 000 respectively and liabilities remain constant, assets would increase
by:
a. None of the above
b. $25 000
c. $15 000
d. $30 000
122. Which of the following are not expenses?
a. Cost of goods sold
b. Dividends paid
c. Wages earned but yet to be paid
d. Interest on a loan
123. An account for advertising that had appeared in a local newspaper was received.
There was no previous record of the charge.
a. A liability increased and an expense increased
b. An asset increased and another asset decreased
c. An asset decreased and an expense increased
d. An asset decreased and a liability decreased
124. Which type of information would be of MOST interest to creditors?
a. Dividends declared
b. Ability of the company to pay debts
c. Last year’s profit
d. Current share price
125. During 2X12 XYZ Ltd’s accounting records show the following:
- Cash sales of $100 000;
- Credit sales of $100 000;
- $80 000 of the 20X1 credit sales was collected at year-end;
- XYZ Ltd pays $50 000 in cash expenses;
- Accrued expenses increase by $40 000;
- Depreciation for the year amounts to $30 000;
- Dividends of $60 000 declared and paid on the final day of the year.
Using only the date provided, what is XYZ Ltd’s accrual profit?
a. $100 000
b. $80 000
c. None of the above
d. $160 000
e. $120 000