equityunge (0) by placing the appresign in the appropriate column.Problem #5Transactions that Affect the Elements of Financial Statementsa. Decrease an asset and decrease owner's equity (use of assets event).b. Increase a liability and decrease owner's equity (exchange of claims event).c. Increase an asset and increase owner's equity (source of assets event).d. Decrease a liability and increase owner's equity (exchange of claims event).e. Increase an asset and decrease another asset (exchange of assets event).f. Increase an asset and increase a liability (source of assets event).g. Decrease an asset and decrease a liability (use of assets event).Required: Be able to give an example of a transaction for each of the above.

Accounting equation in business says that total assets should be equal to total liabilities and…

Answered: Problem #5 Transactions that Affect the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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According to the rules of debit and credit for balance sheetaccounts:a. Increases in asset, liability, and owners’ equity accountsare recorded by debits.b. Decreases in asset and liability accounts are recorded bycredits.c. Increases in asset and owners’ equity accounts arerecorded by debits.d. Decreases in liability and owners’ equity accounts arerecorded by debits.
Which of the following statements concerning the debit-credit feature of the accounting equation is CORRECT? A debit entry will decrease a liability account and increase an asset account Debits is entered on the right and credit are entered on the left liability account should be credited upon payment of an account payable. Stock sold to investors increases stockholders' equity and is recorded as a debit
QA)Choose the correct answer: 2. Which is a shareholders' equity account in the statement of financial position? Select one: a. Dividends payable. b. Marketable securities c. Issued capital. d. Accumulated depreciation. 3. Making insurance payments in advance is an example of: Select one: A. An accrued receivable transaction. B. An accrued liability transaction. C. An unearned revenue transaction. D. A prepaid expense transaction 4. Cost of goods sold is: Select one: a. An asset account. b. A permanent equity account. c. An expense account. d. A revenue account.
Indicate for each transaction whether the assets (A), liabilities (L) or owner’s equity (OE) increased (+), decreased (-) or did not change (0) by placing the appropriate sign in the appropriate column. If more than 1 asset or liability had been affected, indicate both effects.
InstructionsIndicate with the appropriate letter whether each of the transactions above results in: (a) An increase in assets and a decrease in assets. (b) An increase in assets and an increase in owner’s equity. (c) An increase in assets and an increase in liabilities. (d) A decrease in assets and a decrease in owner’s equity. (e) A decrease in assets and a decrease in liabilities. (f) An increase in liabilities and a decrease in owner’s equity. (g) An increase in owner’s equity and a decrease in liabilities.
Which statement is not true about a balancesheet?a. It provides proof that Assets 5 Liabilities 1Owners’ equity.b. It lists the current, fixed, and intangibleassets.c. It summarizes the firm’s revenues andexpenses during one accounting period.d. It gives the liabilities of the firm.e. It shows the owners’ equity in thebusiness.
Which of the following accounting procedures are INCORRECT? I) Asset An increases, Debit & A decrease, Credit II) Capital - Arn increases, Debit & A decrease, Credit II) Expenses - An increases, Debit & A decrease, Credit IV) Income An increases, Debit & A decrease, Credit V) Liabilities An increases, Credit & A decrease, Debit I and V only Il and IV only I,Il and III only I,IIl and V only
For each of the following categories, state concisely a transaction that will have the required effecton the elements of the accounting equation.a. Increase an asset and increase a liability.b. Decrease an asset and decrease a liability.c. Increase one asset and decrease another asset.d. Increase an asset and increase owners’ equity.e. Increase one asset, decrease another asset, and increase a liability.
3. Which is not a possible combination of a journal entry?A.Decrease in equity and increase in liabilityB.Decrease liability and decrease in assetC.Increase in asset and increase in liabilityD. Increase in asset and decrease in equity
For each of the following categories, state concisely a transaction that will have the required effect on the elements of the accounting equation. Increase an asset and increase a liability. Decrease an asset and decrease a liability. Increase one asset and decrease another asset. Increase an asset and increase owners’ equity. e. Increase one asset decrease another asset and increase a liability
What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner. Asap
A credit is used to record an increase in all of the following accounts exceptA. Utility Expense.B. Share Capital.C. Accounts Payable.D. Service Revenue.2. Generally, all of the following financial statements can be prepared with informationfrom the trial balance exceptA. Income Statement.B. Statement of Cash Flows.C. Statement of Retained Earnings.D. Statement of Financial Position.3. The Dividends account is increased with a debit because dividendsA. are an expense.B. are declared an asset.C. reduce liabilities.D.result in a decrease in equity, so debiting Dividends would have the effect ofdecreasing Equity.4. When a company pays cash for a truck, what is the effect on the accounting equationfor that company?A. Increase assets and increase liabilities.B. Decrease assets and decrease liabilities.C. Increase assets and increase equity.D. No net change.5. Gordon Company was recently formed with a $5,000 investment in the company byshareholders. The company then borrowed $2,000 from a…

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