Question No, (6) Choose the correct answer: 1. Which of the following transactions decreases both assets and stockholders' equity? a. Payment of dividend cash. b. Advance payment made for insurance c. Receipt of a phone bill, to be paid at a later time 2. d. Payment of a liability a. Which of the following accounts will not affeet stockholders' equity? a. Advertising Expense b. Dividends c. Land d. Revenues 3. Which of the following does not affect retained earnings? a. Payment of dividends b. Earning of revenues c. Investments by stockholders d. Incurring of expenses 4. When cash collection is made from an Accounts Receivable, a. stockholders' equity increases. b. total assets decrease. c. total assets remain the same. d. total assets increase. 5- Which of the following is a business event that is also considered a recordable transaction? a. A company hires a new employee. b. A customer purchases merchandise. c. A company orders a product from a supplier. d. An employee sends a purchase request to the purchasing department. 6 Which pair of accounts follows the rules of debit and credit in the same manner? a. Revenue from Services and Unearned revenues b. Prepaid Rent and Advertising Revenue c. Repair Expense and Notes Payable d. Common Stock and Rent Expense 7 Which of the following items has no effect on Liabilities? a. Land purchased on account b. Revenues from services performed on account c. Expenses incurred on account d. Dividend declared and not yet paid 8. When a magazine company receives advance payment for a subscription, it a. debits Cash and credits Unearned Subscriptions Revenue. b. debits Prepaid Subscriptions and credits Cash. c. debits Cash and credits Subscriptions Revenue. d. debits Uneamed Subscriptions Revenue and credits Cash