The payment of past debt by the entity will cause a decrease in asset due to the outflow of cash, and what corresponding effect on liabilities? a. No effect b. Decrease c. The transaction would cause no effect on both accounts. d. Increase
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The payment of past debt by the entity will cause a decrease in asset due to the outflow of cash, and what corresponding effect on liabilities?
a. No effect
b. Decrease
c. The transaction would cause no effect on both accounts.
d. Increase
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- Which of the following would be included in the financing section? A. loss on sale of investments B. depreciation expense C. increase in notes receivable D. decrease in notes payableExchanges of assets for assets have what effect on equity? A. increase equity B. may have no impact on equity C. decrease equity D. There is no relationship between assets and equity.What is the impact on the accounting equation when a payment of account payable is made? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
- Which type of adjustment occurs when cash is either collected or paid, but the related income or expense is not reportable in the current period? A. accrual B. deferral C. estimate D. cullThe collection of cash from customers to which they owe to the entity from its past rendering of services would cause what effect on corresponding accounts? a. No effect on neither assets nor liabilities b. Decrease in assets c. Increase in assets d. Increase in liabilitiesWhich of the following returns is consistent with contractual cash flows that are solely payments of principal and interest or SPPI? I. Return of passage of time II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset IV. Return for amounts to cover expenses and a profit margin a. I, II, III, and IV b. I, II, and III c. I and IV only d. II and III only
- If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit?The payment of liabilities would cause what effect on corresponding accounts? Both increase in assets and liabilities Increase in liabilities and decrease in assets Increase in assets and decrease in liabilities Both decrease in assets and liabilitiesWhich of the following returns is consistent with contractual cash flows that are SPPI? Return for passage of time. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Return for amounts to cover expenses and a profit margin. Group of answer choices I, II and III only I and IV only I, II, III and IV II and III only
- Which statement is incorrect? Under cash basis of accounting, A. revenue is recorded when earnedB. expenses are recorded when paid.C. depreciation expense is recognized.D. bad debts expense is not recognized.E. none of the aboveA basic difference between loss contingencies and “real”liabilities is: a. Liabilities stem from past transactions; loss contingen-cies stem from future events. b. Liabilities always are recorded in the accountingrecords, whereas loss contingencies never are.c. The extent of uncertainty involved. d. Liabilities can be large in amount, whereas loss contin-gencies are immaterial.Analyze the following transactions and identify its effects on assets, liabilities, and capital. Write ? for increase, ? for decrease, NE for No effect and I/D if the effect is only in one major accounts. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.