When the company pays stockholders a dividend, what is the effect on the accounting equation for that company?

A) Decrease stockholders' equity and increase assets.

B) Increase liabilities and increase assets.

C) Decrease assets and decrease liabilities.

D) Decrease assets and decrease stockholders' equity.

Answer: D

Receiving cash from customers before services are performed results in:

A) Prepaid Assets.

B) Service Revenue.

C) Deferred Revenues.

D) Accounts Receivable.

Answer: C

Receiving cash from an account receivable:

A) Increases revenue and decreases an asset.

B) Decreases a liability and increases an asset.

C) Increases an asset and increases revenue.

D) Increases one asset and decreases another asset.

Answer: D