1) UM Associates paid $30,000 wages in advance for 6 months

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1) UM Associates paid $30,000 wages in advance for 6 months. This transaction is most likely to result in: 

 

Group of answer choices 

a.) An increase in net assets. 

b.) A decrease in net assets. 

c.) No change in net assets. 

d.) No answer text provided.

 

2. Agka Lee is a manufacturer of shovel and mining equipment. It collects 50% of the
invoiced amount in advance when customers place their orders and
collects the remaining 50% upon delivery of the equipment. The company only
recognizes the sale on its financial statements once the product is
delivered. The most likely effect of a customer placing an order worth
$7,000 on its financial statements is:

 

Group of answer choices

a.) An increase in liabilities of $3,500.

b.) An increase in assets of $7,000.

c.) No effect on liabilities.

d.) No answer text provided.