TB 02-62 Your company pays back $2 million on a loan ...Your company pays back $2 million on a loan it had received earlier from a bank. How does this transaction affect the accounting equation?Multiple ChoiceAssets are unchanged, liabilities increase by $2 million, contributed capital decreases by $2 million.CEAssets decrease by $2 million, liabilities decrease by $2 million, shareholders' equity is unchanged.Assets decrease by $2 million, liabilities are unchanged, contributed capital decreases by $2 million.Assets are unchanged, liabilities and shareholders' equity both increase by $2 million.

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Description: TB 02-62 Your company pays back $2 million on a loan ...Your company pays back $2 million on a loan it had received earlier from a bank. How does this transaction affect the accounting equation?Multiple ChoiceAssets are unchanged, liabilities increa

Accounting equation: As per dual aspect concept every transaction has a dual aspect. For every debit…

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Your company pays back $2 million on a loan it had received earlier from a bank. How does this transaction affect the accounting equation? Multiple Choice O Assets are unchanged, liabilities increase by $2 million, contributed capital decreases by $2 million. Assets decrease by $2 million, liabilities decrease by $2 million, shareholders' equity is unchanged. Assets decrease by $2 million, liabilities are unchanged, contributed capital decreases by $2 million. Assets are unchanged, liabilities and shareholders' equity both increase by $2 million.

Your company pays back $2 million on a loan it had received earlier from a bank. How does this transaction affect the accounting equation? Multiple Choice O Assets are unchanged, liabilities increase by $2 million, contributed capital decreases by $2 million. Assets decrease by $2 million, liabilities decrease by $2 million, shareholders' equity is unchanged. Assets decrease by $2 million, liabilities are unchanged, contributed capital decreases by $2 million. Assets are unchanged, liabilities and shareholders' equity both increase by $2 million.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 2SEQ: The receipt of $8,000 cash for fees earned was recorded by Langley Consulting as an increase in cash...

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The receipt of $8,000 cash for fees earned was recorded by Langley Consulting as an increase in cash of $8,000 and a decrease in retained earnings (revenues) of $8,000. What is the effect of this error on the accounting equation? A. Total assets will exceed total liabilities and stockholders’ equity by $8,000. B. Total assets will be less than total liabilities and stockholders’ equity by $8,000. C. Total assets will exceed total liabilities and stockholders’ equity by $16,000. D. The error will not affect the accounting equation.
Effects of transactions on Accounting equation On Time Delivery Service had the following selected transactions during November: 1. Received cash from issuance of common stock, $75,000. 2. Paid rent for November, $5000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (9), in a vertical column, and inserting at the right of each number the appropriate letter from he following list: a. Increase in an asset, decrease in another asset. h. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders’ equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders equity.
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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 bank, purchased $1,000 ofsupplies on account, and also purchased $5,000 of equipment by paying $2,000 in cashand signing a note for the balance.Based on these transactions, the company's totalassets areA. S7.000.B. $9.000.C. $11.000.D. $12.000.