13. On August 1, XYZ Inc. paid $5,000 in advance for September, October, and November rent.What would be the effect on the accounting equation for the transaction?a Increase Equity and decrease equityb.Increase Assets and decrease assetsIncrease Liabilities decrease assetsd. There is no effect on the accounting equation14. Assume Jacob performs a service and gets paid $100 later. Under what accounting method wouldthis transaction fall under?a. Cash Basis of Accountingb.Accrual Basis of AccountingC.Both Cash Basis and Accrual Basis of Accountingd. It would not fall under any accounting method15. Assume Jennifer decides to perform a service and gets paid $70 cash. Under what accountingmethod would this transaction fall under?a.Accrual Basis of Accountingb. Cash Basis of AccountingC.Both Cash Basis of and Accrual Basis of Accountingd. It would not fall under any accounting method

Answered: 13. On August 1, XYZ Inc. paid $5,000…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter2: Analyzing Transactions: The Accounting Equation

Section: Chapter Questions

Problem 4SEB: EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first...

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13. On August 1, XYZ Inc. paid $5,000 in advance for September, October, and November rent.
What would be the effect on the accounting equation for the transaction?
a Increase Equity and decrease equity
b.
Increase Assets and decrease assets
Increase Liabilities decrease assets
d. There is no effect on the accounting equation
14. Assume Jacob performs a service and gets paid $100 later. Under what accounting method would
this transaction fall under?
a. Cash Basis of Accounting
b.
Accrual Basis of Accounting
C.
Both Cash Basis and Accrual Basis of Accounting
d. It would not fall under any accounting method
15. Assume Jennifer decides to perform a service and gets paid $70 cash. Under what accounting
method would this transaction fall under?
a.
Accrual Basis of Accounting
b. Cash Basis of Accounting
C.
Both Cash Basis of and Accrual Basis of Accounting
d. It would not fall under any accounting method

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Accounting equation is one of the fundamental concept in accounting. It says that total assets in the business must be equal to total liabilities and equity.

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