1. The receipt of cash on account from customers would:

• A. Decrease an asset and decrease a liability.

• B. Increase one asset and decrease another asset.

• C. Increase an asset and increase stockholders equity.

• D. Increase an asset and increase a liability.

• E. None of the above.

2. Investment of additional cash in the business by the stockholders would:

• A. Decrease an asset and decrease a liability.

• B. Increase an asset and increase a liability.

• C. Increase an asset and increase stockholders equity.

• D. Increase one asset and decrease another asset.

• E. None of the above

3.

The creditors of an organization are the companies and individual customers who owe the business for goods and services purchased on account.

A. True

B. False

4. The payment of business debts:

• A. Increases a liability account.

• B. Increases stockholders equity.

• C. Has no effect on stockholders equity.

• D. Increases assets

5.

The laws of incorporation of each state require that the partnership agreement list the duties of each partner and the distribution of income and loss to the partners.

A. True

B. False

6. In accounting, the resources of a business organization are called:

• A. Assets.

• B. Proprietorship.

• C. Creditors equity.

• D. Stockholders equity.

• E. None of the above.

7. Gomex Company collected $600 of its $12,000 accounts receivable. How is the balance sheet affected?

• A. Cash increased $600, and Retained Earnings increased $600 because revenue was received.

• B. Accounts Receivable is decreased by $600, and Retained Earnings is decreased by $600.

• C. Total assets are decreased, but liabilities and stockholders equity remain the same.

• D. There is no change in total assets, liabilities, or stockholders equity.

• E. There is no change in any of the balance sheet items.

8. A financial statement that has a date line similar to For the month ended June 30, 20XX, is a(n):

• A. Schedule of accounts receivable.

• B. Balance sheet.

• C. Income statement.

• D. None of the above.

9.

Equities are composed of assets and stockholders equity.

A. True

B. False

10.

Each partner may be held liable for the actions of other partners when they are acting within the scope of the business.

A. True

B. False