QUESTION 20 If merchandise that cost $50,000 is sold for $90,000, what is the effect on the balance sheet? O 1. Assets and stockholders' equity will both increase by $40,000. 2. Assets and stockholders' equity will both decrease by $40,000. O 3. Assets will increase by $90,000 and stockholders' equity will decrease by $50,000. 4. Assets and stockholders' equity will increase by $90,000. QUESTION 21 One difference between a multi-step vs. a single-step income statement is that: O 1. Sales are only reflected on a single-step income statement. 2. A multi-step statement contains subtotals for gross profit and income from operations. O 3.A multi-step statement deducts total expenses in one step from the total of revenues. 4. Net income is only reflected on a multi-step statement