Purchasing office supplies on account will:

A) Not change assets.

B) Increase assets and decrease liabilities.

C) Increase assets and increase liabilities.

D) Increase assets and increase stockholders' equity.

Answer: C

Providing services and receiving cash will:

A) Increase assets and increase stockholders' equity.

B) Increase assets and increase liabilities.

C) Decrease assets and increase liabilities.

D) Decrease liabilities and increase stockholders' equity.

Answer: A

When a company provides services on account, the accounting equation would be affected as follows:

A) Assets increase.

B) Revenues increase.

C) Assets increase and liabilities decrease.

D) Assets increase and stockholders' equity increases.

Answer: D

Borrowing cash from the bank would have what effect on the accounting equation?

A) Assets increase and stockholders' equity increases.

B) Assets increase and liabilities increase.

C) Liabilities increase and stockholders' equity decreases.

D) Liabilities decrease and stockholders' equity increases.

Answer: B

Paying salaries to employees for the current period would have what effect on the accounting equation?

A) Liabilities increase and stockholders' equity decreases.

B) Assets decrease and liabilities decrease.

C) Assets decrease and stockholders' equity decreases.

D) Liabilities decrease and stockholders' equity increases.

Answer: C

An expense has what effect on the accounting equation?

A) Decrease liabilities.

B) Decrease stockholders' equity.

C) Increase assets.

D) No effect.

Answer: B

Revenues have what effect on the accounting equation?

A) Increase liabilities.

B) Decrease assets.

C) Increase stockholders' equity.

D) No effect.

Answer: C