Question

11. Jason Repair Company incurred $1.500 as an advertising expense and promised to pay the advertising agency within 30 days. The company is a sole proprietorship. Which of the following will decrease as a result of this transaction? A) Assets B) Jason, Capital C) Liabilities D) Revenues 12. Montgomery Equipment Rental Company received $1,000 cash from a customer, the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation? A) Accounts Receivable increases and Service Revenue increases B) Cash increases and Accounts Receivable decreases C) Cash increases and Service Revenue increases D) Cash increases and Accounts Payable decreases 13. Diamond Company had the following transactions during June Performed services for $5.00 on account; received cash on account, $7.000; paid $600 for repair expense; paid $2,000 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June transactions? A) 54 400 increase B) 54 400 decrease C) 570 increase D) $2.000 decrease 14) Mitchell Company receives all from one of its suppliers for advertising services received and will pay the supplier next month. How does the receipt of the bill from the supplier affect the counting equation of Mitchell A) and equity decrease B) is increase and quality decreases C) bits ince

Answer 1

11 . B. Jason, capital.

12. B. Cash increases and Accounts Receivable decreases.

13. A. $4,400 increase ( $7,000 – $600 – $2,000 )

14. B. liabilities increase and equity decreases.