D1 The sale of an asset on credit for what it cost increases assets and liabilities. decreases assets and liabilities. leaves total assets unchanged. decreases assets and increases liabilities. D 2. When collection is made on Accounts Receivable, total assets will remain the same. stockholders equity will increase. D 3. A revenue generally increases assets and liabilities. increases assets and stockholders' equity. increases assets and decreases stockholders' equity. leaves total assets unchanged. D 4. A paid dividend decreases assets and stockholders' equity. 4. A paid dividend decreases assets and stockholders' equity. increases assets and stockholders' equity. increases assets and decreases stockholders' equity. decreases assets and increases stockholders' equity. 5. Peceiving payment of a portion of an accounts receivable Receiving payment of a portion of an accounts receivable will not affect total assets. increase liabilities. increase stockholders' equity. decrease net income. 6. An expense decreases assets and liabilities. decreases stockholders' equity. leaves stockholders' equity unchanged. is basically the same as a liability. D7 Which of the following items has no effect on retained earnings? Expense Dividends Land purchase Revenue D 8. If a company buys a $700 machine on credit, this transaction will affect income statement and retained earnings statement only. income statement only. income statement, retained earnings statement, and balance s balance sheet only. A payment of a portion of an accounts payable will not affect total assets. increase liabilities. not affect stockholders' equity. decrease net income. 10. Powers Corporation received a cash advance of $500 from a custom assets increased by $500. equity increased by $500. liabilities decreased by $500. Both assets and equity increased by $500. D 11 Courtney Company purchased equipment for $1,800 cash. As a result equity decreased by $1,800. assets increased by $1,800. total assets remained unchanged. Both assets and equity decreased by $1,800. 12. Comstock Company provided consulting services and billed the assets remained unchanged. assets increased by $2,500. equity increased by $2,500 Both assets and equity increased by $2,500. D 13 Budke Corporation paid dividends of $5,000. As a result of this event, the Dividends account was increased by $5,000. Dividends account was decreased by $5,000. Cash account was increased by $5,000. Cash was increased and the Dividends account was decreased by 14. If a company pays dividends of $10,000, stockholders' equity will be reduced by $10,000. net income will be reduced by $10,000. retained earnings will be reduced by $10,000. Both retained earnings and stockholders' equity will be reduced b- 34:21 15 If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck, assets will be increased by $10,000. equity will be reduced by $40,000. assets will be increased by $40,000. assets will be unchanged. 16. Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not? Yes, they are treated as revenue at the time of receipt because the company has access to the cash. No, the amount of revenue cannot be adequately determined until the company completes the work. Yes, The intent of the company is to perform the work and the customer is confident that the services will be complete No, revenue cannot be recognized until the work is performed. D 17. The receipt of cash in advance from a customer increases assets and stockholders' equity. increases assets and decreases stockholders' equity. increases assets and liabilities. none of these answer choices are correct