1. Current expense for payroll represents:
a. Gross pay earned by employees
b. Net pay earned by employees
c. Employer's federal and state payroll tax obligation
d. Employer's liability for various withholdings that taken out of the gross pay earned by employees
2. Which of the given is not the owner's equity account?
a. Common stock
b. Capital stock
c. Retained earnings
d. Minority interests
3. Retained earnings represent:
a. The present value of dividends paid out for last 2 years
b. The total net income of firm since its beginning
c. Net income that has been reinvested in the company
d. Net income plus gains (or minus losses) on treasury stock transactions
4. Principal reason for a company having common stock split is to:
a. Increase total cash dividends paid to stockholders
b. Capitalize retained earnings
c. Decrease total owners' equity
d. Decrease market value per share of common stock