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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

What are the effects of the following transactions on the accounting equation? Indicate an increase (+) or decrease (−) under the affected asset, liability, and owner’s equity headings.

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To determine

Indicate an increase or decrease under the affected asset, liability, and owners’ equity.

Explanation

  Assets: These are the resources owned and controlled by business and used to produce benefits for the company. Assets are classified on the balance sheet as current assets, non-current assets, property, plant, and equipment, and intangible assets.

  Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

  Owners’ equity: The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Thus, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders...

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