1. Dividens payable typiclly arise because
a. creditors want a return on funds loaned to a company
b. cash is paid for dividends previously declared in another accounting period
c. the board of directors have declared a dividen which will be paid at a later date
d. bond investors deman a return
2. Unearned revenue typically arises because
a. cash is recd as security which willl be paid back in the future
b. cash is recd from customers piror to the rendering of services or delivery of products
c. a company temporarily requires cash for operations
d. merchandise is sold to customers prior to payment
3. Purhasing inventory on account will
a. increase liability and increase an asset
b. decrease revenue and increase expense
c. increase revenue and increase expense
d. decrease a liability and increase net worth
4. If an interest bearning note is issues a par, then the contractual cash payment for interest is
a. greater than interest expense
b. less than interest expense
c. equal to interest expense
d. there is no interest expense
