Question Completion:
The impact on accounting equation:
Answer:
Assets = Liabilities + Equity
a. Cash +$6,200 = Liabilities + Retained Earnings + $6,200
b. Accounts Receivable +$4,700 = Liabilities + Retained Earnings + $4,700
c. Cash -$1,750 = Liabilities + Retained Earnings -$1,750
d. Cash + $2,350; Accounts Receivable -$2,350 = Liabilities + Equity
e. Cash - $840 = Liabilities + Retained Earnings -$840
Explanation:
The accounting equation states that Assets = Liabilities + Equity. This equation means that every business transaction has effect on either side or both sides of the equation. For every transaction, the Assets are increased or decreased and Liabilities + Equity are increased or decreased. And sometimes, only one side is affected by a transaction. This means that the affected side is increased and decreased by one transaction. Case "d" is typical example.
