Providing services to customers for cash would have what effect on the accounting equation?

A) Total assets increase; total stockholders' equity increases.

B) Total assets increase; total liabilities decrease.

C) Total liabilities decrease; total stockholders' equity increases.

D) Total liabilities increase; total stockholders' equity decreases.

Answer: A

Paying for supplies previously purchased would have what effect on the accounting equation?

A) Assets decrease and stockholders' equity decreases.

B) Assets increase and liabilities increase.

C) Liabilities decrease and stockholders' equity increases.

D) Assets decrease and liabilities decrease.

Answer: D

If a company provides services on account, which of the following is true?

A) Expenses increase.

B) Liabilities increase.

C) Stockholders' equity increases.

D) Assets decrease.

Answer: C

When a payment is made on an account payable:

A) Assets and stockholders' equity decrease.

B) Assets and liabilities decrease.

C) Liabilities and revenues decrease.

D) Assets and expenses decrease.

Answer: B

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