Question

bconomiassumption monetary ni mion periodicity assumption 17. If total liabilities decreased by 4.000, then t e sex holders' equity must have decreased by 14.000 as must have decreased by $4.000 osobedien wets and sockholders' equity each increased by 12.000 sets must have increased by 54.000 18. If expenses are paid in casethen sets will increase b. liabilities will decrease wockholders equity will increase dass will decrease 19. The payment of a liability a decreases assets and stockholders' equity increases assets and decreases liabilities decreases assets and increases liabilities d decreases assets and liabilities 20. A paid dividend a decreases assets and stockholders' equity increases assets and stockholders' equity increases assets and decreases stockholders' equity d. decreases assets and increases stockholders' equity 21.A: 10'122. Met Industries had an Accounts Payable balance of $140.000. During the mode de p hase e account of $160,000. At 1031/2, the Ac account of $100,000 and made payments balance is a $140.000 debit $20,000 credit C S80.000 credit $160,000 credit 22. Ar February 1, 2012, the balance in Goebel Inc. suppliers account was 5.500. During FebruaryGochel purchased supplies of the be $1.000 and used supplies of 54,000. At the end of February, the balance in the Supplies $3.500 debit b. $4,500 credit S10.500 debit a $2.500 debit ker collected cash of $60.000 23. At September 1.2022. Kem Enterprises reported a cash bace of 5140.000. During the ma and made disbursements of S100,000. Al September 30, 2023. the cash balance is $40,000 credit b S100,000 credit $200.000 debit d S100.000 debit 24. If the Cash account has a credit balance, which of the following statement is true This is the normal balance for cash An error has occurred and must be corrected before financial statements can be prepared The account needs to be analyzed to determine the reason for the credit balance. d Debit postings exceed the credit postings for the accounting period 2. Which of the following statements is not true? Expenses increase stockholders' equity, b. Expenses have normal debit balances.

Answer 1

17. Liability is decreased by $4,000 then is it should decrease by dollars 4000 or stockholders equity should increase by $4,000.

Option b.

18. If expenses are paid in cash then assets will decrease because cash is included under assets.

Option d.

19. Payment of liability decreases both the assets and liabilities.

Option d.

20. Dividend paid decreases assets and stockholders equity because the cash paid reduces the assets and the amount of dividend paid reduces the balance in the retained earnings.

Option a.

21. Accounts payable is a liability and has a credit balance.

Opening balance + Purchases - Payments = Closing balance

$140,000 + $100,000 - $160,000 = $80,000

Option c.

22. Supplies is an asset and has a debit balance.

Opening + Purchase - Used = Closing balance

$3,500 + $3,000 - $4,000 = $2,500

Option d.

23. Cash account has a debit balance.

Opening balance + Collections - Disbursements = Closing balance

$140,000 + $60,000 - $100,000 = $100,000

Option d.

24. Cash account always has a debit balance and if there is a credit balance it is because of some error while preparing a cash account.

Option b.