1.
Financial statements: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making.
Transaction: The economic events which bring about any changes in the financial items of a business, and can be measured in the monetary units is referred to as a transaction.
To identify: How and where the cost of internet service would be reported by Corporation S.
2.
To identify: The effect on assets, liabilities, and equity when Corporation S receives the internet service bill.
3.
To identify: The effect on assets, liabilities, and equity when Corporation S pays the internet service bill.
4.
To identify: The impact on Corporation S’s net income, if the cost of internet service will increase by 4% in the coming year.
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Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)