On January 10, Rock Company purchases $20,000 worth of office supplies on credit. On January 22, Rock Company pays $20,000 cash related to this purchase. 1. The journal entry to record the January 10 transaction will have the following effect on Rock Company's financial statements: a. Total Liabilities will increase by $20,000. b. Total Assets will decrease by $20,000. c. Total Expenses will increase by $20,000. d. Total Stockholders' Equity will decrease by $20,000. e. None of the above. 2. The journal entry to record the January 22 transaction will have the following effect on Rock Company's financial statements: a. Total Liabilities will increase by $20,000. b. Total Assets will decrease by $20,000. c. Total Expenses will increase by $20,000. d. Total Stockholders' Equity will decrease by $20,000. e. None of the above. 3. Fox Company's controller accidentally erased the 1/1/21 balance for the Accounts Payable account. However, he can see that the 1/31/21 Accounts Payable balance is $500,000, the company purchased $1,500,000 in goods on account during January 2021, and paid $1,600,000 cash related to accounts payable during January 2021. What was the 1/1/21 Accounts Payable balance? a. $400,000 b. $500,000 c. $600,000 d. $1,100,000 4. A purchase of a machine is recognized in the accounting records when: a. the buyer gets title to the machine. b. the buyer receives the seller's bill. c. payment is made for the machine purchased. d. the purchase order is sent to the purchasing department 5. Which of the following accounts is increased with a DEBIT? a. Rent Payable b. Prepaid Insurance c. Service Revenue d. All of the above Which of the following statements is FALSE about a journal entry? a. All debits are always listed before any credits. b. It may have more than one debit or credit entry. c. Credits are always indented. d. Accounts that are increased are always listed first