d. decrease assets and decrease liabilities
19. Which of the following is( are) a deficiency( deficiencies) of cash−basis accounting?
a. it omits key revenues and expenses from the balance sheet b. it fails to match revenues and expenses to measure economic performance c. it omits key assets and key liabilities from the balance sheet d.
B and C
20. On May 1, Gomez Company paid $ 36,000 for rent. The rent covers the period May 1 through August 31. Gomez Company recorded Prepaid Rent of $ 36,000. What is the balance in the Prepaid Rent account on June 1?
a. $ 18,000
b. $ 9,000
c. $ 27,000
d. $ 0
21. Retained earnings are a general claim against ________.
a. stockholders