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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Describe a transaction that resulted in the following changes in accounts:

  1. a. Rent Expense is increased by $1,050, and Cash is decreased by $1,050.
  2. b. Advertising Expense is increased by $835, and Accounts Payable is increased by $835.
  3. c. Accounts Receivable is increased by $372, and Service Income is increased by $372.
  4. d. Cash is decreased by $410, and C. Tryon, Drawing, is increased by $410.
  5. e. Equipment is increased by $1,850, Cash is decreased by $850, and Accounts Payable is increased by $1,000.
  6. f. Cash is increased by $1,650, and Accounts Receivable is decreased by $1,650.

To determine

Give the business transaction for the effect of given transactions.

Explanation

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.

Give the business transaction for the effect of given transactions.

a.

Effect of accounting equation: Rent expense increased, Cash decreased.

Business transaction: Cash of $1,050 paid for rent expense.

b.

Effect of accounting equation: Advertising expense increased, Accounts Payable decreased.

Business transaction: Advertising expense of $835 is billed but payment is due.

c.

Effect of accounting equation: Accounts Receivable increased, Service Income increased.

Business transaction: Service Income of $372 earned on account...

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