Short-term investments

I. provide liquidity.
II. fill an important part of most investment programs.
III. provide a high rate of return with low risk.
IV. provide resources for emergencies.

A) I and IV only
B) II and IV only
C) I, II and IV only
D) I, II, III and IV

Answer: C

Business

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Hamilton Lawn Service earned $1,000 for services rendered and collected cash from its customer. What is the effect on accounts?

A) Cash account increases; Accounts payable increases. B) Cash account increases; Accounts receivable increases. C) Cash account increases; Supplies account decreases. D) Cash account increases; Owner's capital account increases.

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A business repays the amount borrowed on a note with cash. Which of the following accounts is debited?

A) Cash B) Accounts Payable C) Notes Payable D) Notes Receivable

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