Multiple Choice Questions
1. An investment of cash into the business will
a. Decrease total liabilities.
b. Decrease total assets.
c. Have no effect on total assets.
d. Increase stockholders equity.
2. Purchasing a laptop computer on account will
a. Increase total liabilities.
b. Have no effect on stockholders equity.
c. Increase total assets.
d. All of the above.
3. Performing a service on account will
a. Increase stockholders equity.
b. Increase total assets.
c. Increase total liabilities.
d. Both a and b.
4. Receiving cash from a customer on account will
a. Increase total assets.
b. Decrease liabilities.
c. Increase stockholders equity.
d. Have no effect on total assets.
5. Purchasing computer equipment for cash will
a. Decrease both total assets and stockholders equity.
b. Increase both total assets and total liabilities.
c. Have no effect on total assets, total liabilities, or stockholders equity.
d. Decrease both total liabilities and stockholders equity.
6. Purchasing a building for $110,000 by paying cash of $15,000 and signing a note payable for $95,000 will
a. Increase both total assets and total liabilities by $95,000.
b. Increase both total assets and total liabilities by $110,000.
c. Decrease both total assets and total liabilities by $15,000.
d. Decrease total assets and increase total liabilities by $15,000.