Question

75. A business must only invest in an accounting information system in which the benefits received...

75. A business must only invest in an accounting information system in which the benefits received outweigh the cost of the system.

True

False

77. Exchange Company collected $14,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Exchange?

A.assets increase by $14,000; liabilities decrease by $14,000

B.assets increase by $14,000; liabilities increase by $14,000

C.assets increase by $14,000; equity increases by $14,000

D.assets increase by $14,000; assets decrease by $14,000

Business   Accounting   
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Answer #1

75. Answer: True

Cost-benefit is of importance in any business decision and hence, a business must only invest in an accounting system which gives maximum benefit for the least cost.

76. Answer: Option D. assets increase by $14,000; assets decrease by $14,000.

The journal entry to record the collection of previous month dues from one of the customers will be a debit to cash and credit to accounts receivable. Thus, there will be an increase and decrease in assets.

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