Multiple Questions Answers

1. A&M Co. provided services of $1,000,000 to clients on account. How does this transaction affect A&M's accounts? (Points : 2)
1- Increase accounts receivable and cash by $1,000,000 each
2- Increase accounts receivable and revenues by $1,000,000 each
3-Increase accounts receivable and unearned revenues by $1,000,000 each
4-No effect at this time

2. The __________ is prepared with various sections, subsections, and captions that aid in its interpretation and analysis. (Points : 2)
1- accounting equation
2- retained earnings statement
3- intangible asset section
4- classified balance sheet

3. A&M Co. purchased land for $50,000 with $10,000 paid in cash and $40,000 in a note payable due three years from now. What effect does this transaction have on the accounts under the accrual basis of accounting? (Points : 2)
1- Net increase in assets of $40,000 and a net increase in liabilities of $40,000
2-Net increase in assets and liabilities of $50,000
3-Net increase in assets of $50,000 and a net decrease in liabilities of $40,000
4-Net increase in assets of $60,000 and a net decrease in liabilities of $40,000

4. Accrued expenses are ordinarily reported on the balance sheet as (Points : 2)
1 assets.
2 liabilities.
3 fixed assets.
4 prepaid expenses.