Answer:
It's best to invest in the second economy
Explanation:
The question does not provide information on the hypothetical economic expectations of the two economies, but as a risk-averse investor, it's a better idea to try to "spread" the risk instead of concentrating it.
In the first economy, conditions might or might not be good. If they are good, returns will be extraordinary because all stocks will provide good returns, but if conditions take a turn for the worse, all stocks prices will fall and the financial consequences will be catastrophic.
In the second economy, results might never be as good as in the first economy, but they also will not ever be as bad. The risk is spread between various stocks, and while some may fall in price, others will rise, and viceversa. For a risk-adverse investor, this a far better option.
Answer: The correct answer is B : a $5,000 decrease in cash, a $15,000 increase in notes payable, and a $20,000 increase in equipment, all entered on the same date.
Explanation: The option B is correct because we are accounting for a purchase of a piece of equipment. The options in the questions show that the purchase was partly through cash and partly through notes payable. Since that is the case, the appropriate entries should record a cash outflow (credit to cash to decrease it), increase in notes payable as a result (credit to notes payable to increase) and subsequently, increase in equipment (debit to equipment). <em>So, the total credits equal the total debit.</em>
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Depreciation Expense is a temporary account since it is an income statement account.
Therefore, the answer is
b . False
