Question :
11. During March, Connor Corporation purchased supplies for cash. The supplies : 1224870
11. During March, Connor Corporation purchased supplies for cash. The supplies will be used in April. What effect does this transaction have on the accounting equation at the time the supplies are purchased?
A. Assets increase and stockholders’ equity decreases
B. Assets and liabilities increase
C. There is no net effect on the accounting equation, as one asset account increases while another asset account decreases.
D. There is no net effect on the accounting equation, as the transaction should not be recognized until April.
12. Bellarim Corporation made cash sales to customers. What effect does this transaction have on the accounting equation?
A. Liabilities and retained earnings increase
B. Assets and liabilities increase
C. Assets and retained earnings increase
D. There is no net effect on the accounting equation, as one asset account increases while another asset account decreases.
13. Clay and Lora each invest $15,000 in Deyer, Inc. and are given shares of stock as evidence of their ownership interest. What effect does this transaction have on the accounting equation of Deyer?
A. Assets and liabilities increase
B. Assets and contributed capital increase
C. Liabilities increase and retained earnings decrease
D. Assets and liabilities decrease
14. Machinery is purchased on credit. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and stockholders’ equity increase
C. Liabilities increase and stockholders’ equity decreases
D. Assets and liabilities decrease
15. Lang Industries provided services to customers then sent invoices for the amounts owed. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and retained earnings increase
C. Liabilities decrease and contributed capital increases
D. Assets and liabilities decrease
16. Lang Industries received payments from customers who had been billed earlier for services provided. What effect does this transaction have on Lang’s accounting equation?
A. Assets and liabilities increase.
B. Assets and stockholders’ equity increase.
C. Assets and liabilities decrease.
D. There is no net effect on the accounting equation, as one asset account increases while another asset account decreases.
17. Payment is made for machinery purchased previously on credit. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and contributed capital increase
C. Liabilities decrease and retained earnings increase
D. Assets and liabilities decrease
18. The telephone bill for the current period is received and recorded, but payment will be made later. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and contributed capital increase
C. Liabilities increase and retained earnings decrease
D. Assets and liabilities decrease
19. Payment is made for the telephone bill which was recorded previously. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and retained earnings increase
C. Liabilities increase and contributed capital decreases
D. Assets and liabilities decrease
20. Services are provided to customers who paid immediately. What effect does this transaction have on the accounting equation?
A. Assets and liabilities increase
B. Assets and retained earnings increase
C. Liabilities increase and retained earnings decreases
D. Assets and liabilities decrease
