In the first three years of operations, Lindsey Corporation reported net income(loss) of $(150,000), $100,000, and $250,000. At the end of the third year, Lindsey Corporation has a balance of $120,000 in its Retained Earnings account. What is the total amount of dividends Lindsey Corporation paid over the three years?

A) $130,000.

B) $120,000.

C) $80,000.

D) $380,000.

Answer: C

The Retained Earnings account had a beginning credit balance of $26,000. During the period, the business had a net loss $12,000, and the company paid dividends of $8,000. The ending balance in the Retained Earnings account is:

A) $6,000.

B) $30,000.

C) $22,000.

D) $14,000.

Answer: A

The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the amount of net income during the year?

A) $1.9 million.

B) $3.2 million.

C) $4.5 million.

D) $1.3 million.

Answer: C

The ending balance of Retained Earnings can best be described as:

A) The amount of cash received from stockholders over the life of the company.

B) The amount of net income over the life of the company not paid to owners in the form of dividends.

C) The amount of dividends paid over the life of the company.

D) The amount of net income over the life of the company.

Answer: B

When a company prepares closing entries, which one of the following is NOT a correct closing entry?

A) Debit Retained Earnings; credit Salaries Expense.

B) Debit Dividends; credit Retained Earnings.

C) Debit Service Revenue; credit Retained Earnings.

D) All of the other answers are incorrect.

Answer: B

Which of the following accounts will NOT be involved in closing entries?

A) Prepaid Insurance.

B) Service Revenue.

C) Utilities Expense.

D) Retained Earnings.

Answer: A

Of the following six accounts, which ones have temporary balances:

(1) Service Revenue

(2) Dividends

(3) Salaries Expense

(4) Common Stock

(5) Retained Earnings

(6) Cash

A) (1), (2), and (3).

B) (4), (5), and (6).

C) (2), (4), and (5).

D) (1), (3), and (5).

Answer: A