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Receiving assets from customers before services are performed results in

Receiving assets from customers before services are performed results in:

a. Prepaid Assets.

b. Service Revenue.

c. Unearned Revenues.

d. Accounts Receivable.

 

 

56. When the company pays stockholders a dividend, what is the effect on the accounting equation for that company?

a. Decrease stockholders’ equity and increase assets.

b. Increase liabilities and increase assets.

c. Decrease assets and decrease liabilities.

d. Decrease assets and decrease stockholders’ equity.

 

 

57. Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11

Pumpkin collected the cash from that customer. What is the impact on Pumpkin’s accounting equation from the collection of cash?

a. No net effect to the accounting equation.

b. Decrease assets and increase liabilities.

c. Increase assets and increase liabilities.

d. Decrease assets and decrease liabilities.

 

 

58. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true?

a. The company records service revenue on October 15.

b. The company records cash collection November 20.

c. The company records unearned revenue on October 15.

d. The company records nothing on October 15.

 

 

59. Which of the following would increase assets and increase liabilities?

a. Provide services to customers on account.

b. Purchase office supplies on account.

c. Pay dividends to stockholders.

d. Receive a utility bill but do not pay it immediately.

 

 

60. Receiving cash from an account receivable:

a. Increases revenue and decreases an asset.

b. Decreases a liability and increases an asset.

c. Increases an asset and increases revenue.

d. Increases one asset and decreases another asset.

 

 

61. An expense has what effect on the accounting equation? 

a. Decrease liabilities.

b. Decrease stockholders’ equity.

c. Increase assets.

d. No effect.

 

 

62.  Revenues have what effect on the accounting equation? 

a. Increase liabilities.

b. Decrease assets.

c. Increase stockholders’ equity.

d. No effect.

 

 

63. Investments by stockholders have what effect on the accounting equation?

a. Assets increase and liabilities increase.

b. Expenses increase and liabilities increase.

c. Assets increase and revenues increase.

d. Assets increase and stockholders' equity increases.

 

 

64. Which of the following is not possible when recording a transaction?

a. Liabilities increase and assets decrease.

b. Stockholders’ equity increases and assets increase.

c. One asset increases and another asset decreases.

d. Stockholders’ equity decreases and assets decrease.

Jan 27 2020 View more View Less

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