Question

Which activity must occur first when starting a new business?

Select one:

A. Investing activities

B. Operating activities

C. Financing activities

D. They must all occur simultaneously

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Which of the following increases shareholders' equity?

Select one:

a. Recognizing cost of inventory sold to customers

b. Loss on sale of land

c. Declaration and payment of dividends

d. Issuance of common stock

e. Repurchase of the company's stock

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Which of the following is considered to be a financing activity for Collins Company?

Select one:

A. Purchased delivery truck for cash

B. Collected amounts due from customers who had previously charged on account

C. Paid dividends to shareholders

D. Paid interest on long-term notes payable

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Which of the items is found ONLY in a multiple-step income statement?

Select one:

a. extraordinary loss

b. net income

c. operating income

d. cost of goods sold

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The allowance for bad debts account is reported on

Select one:

a. the balance sheet

b. the statement of shareholders' equity

c. the income statement

d. the statement of cash flows

Answer 1

1

Financing activities must occur first when starting a new business

Option C is correct

2

Issuance of common stock increases shareholders' equity.

Option D is correct

3

Paid dividends to shareholders is considered to be a financing activity

Option C is correct

4

Operating income is found ONLY in a multiple-step income statement

Option C is correct

5

The allowance for bad debts account is reported on the balance sheet

Option A is correct