1. (True or False)

The investment of cash by stockholders into a business is treated as a loan because the cash might be used for purchases of equipment, payment of expenses, or other business purposes.

2. (Multiple Choice)

The Income Summary account:

A. will always have a credit balance. B. will appear on a company's balance sheet. C. will receive entries only during the closing process. D. both A and C. E. None of these.