Answered: Earning revenue increases owners'…

Earning revenue increases owners' equity and expenses reduce owners' equity, therefore, revenues are recorded with debit entries and expenses are recorded with credit entries. True False

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter1: Asset, Liability, Owner’s Equity, Revenue, And Expense Accounts

Section: Chapter Questions

Problem 5QY: M. Parish purchased supplies on credit. What is the impact on the accounting equation? a. Increase...

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Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

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Earning revenue increases owners' equity and expenses reduce owners' equity, therefore, revenues are recorded with debit entries and expenses are recorded with credit entries.

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M. Parish purchased supplies on credit. What is the impact on the accounting equation? a. Increase Supplies and decrease Cash. b. Increase Supplies Expense and increase Accounts Payable. c. Increase Supplies Expense and increase Accounts Receivable. d. Increase Supplies and increase Accounts Payable.
What is the effect on the fundamental accounting equation if supplies are purchased on account? How will the fundamental accounting equation change if supplies are purchased with cash? Explain how this purchase will or will not change the owners equity.
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