Intermediate Accounting questions 2024 and 100% correct answers

Collection on an account receivable will increase both cash and accounts receivable. - correct answer False If total assets are increased, there must be a corresponding increase in liabilities or a decrease in stockholders' equity. - correct answer False An increase in an asset is recorded by a debit. - correct answer True Dividends are classified as an expense. - correct answer False - Temporary Liability Under the double-entry system, revenues must always equal expenses. - correct answer False Unearned Service Revenue is classified as a liability on the balance sheet. - correct answer True Income will always be greater under the cash basis of accounting than under the accrual basis of accounting. - correct answer False An adjusting entry to a prepaid expense is required to recognize expired expenses. - correct answer True An expense decreases stockholders' equity. - correct answer True If a company buys a $700 machine on credit, this transaction will affect the - correct answer balance sheet only. Crawford Company started the year with $60000 in its Common Stock account and a credit balance in Retained Earnings of $44000. During the year, the company earned net income of $48000 and declared and paid $20000 of dividends. In addition, the company sold additional common stock amounting to $28000. As a result, the amount of its retained earnings at the end of the year would be - correct answer 72,000 = 44,000+48,000-20,000 Beg RE + NI - DIV The normal balance of any account is the - correct answer side which increases the account.