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Lilit [14]
3 years ago
11

For each of the transactions in items 2 through 13, indicate the two (or more) effects on the accounting equation of the busines

s or company..The owner invests personal cash in the business.AssetsIncrease Decrease No EffectLiabilitiesIncrease Decrease No EffectOwner's (or Stockholders') EquityIncrease Decrease No Effect
Business
1 answer:
user100 [1]3 years ago
7 0

Answer:

2. The owner invests personal cash in the business.

Assets: Increase  

Liabilities: No Effect

Owner's (or Stockholders') Equity: Increase

3. The owner withdraws cash from the business for personal use.

Assets: Decrease

Liabilities: No Effect

Owner's (or Stockholders') Equity: Decrease

4. The company receives cash from a bank loan.

Assets: Increase

Liabilities: Increase

Owner's (or Stockholders') Equity: No Effect

5. The company repays the bank that had lent money to the company.

Assets: Decrease

Liabilities: Decrease

Owner's (or Stockholders') Equity: No Effect

6. The company purchases equipment with its cash.

Assets: one increases and another decreases, but it total assets don't change

Liabilities: No Effect

Owner's (or Stockholders') Equity: No Effect

7. The owner contributes his/her personal truck to the business.

Assets: Increase  

Liabilities: No Effect

Owner's (or Stockholders') Equity: Increase

8. The company purchases a significant amount of supplies on credit.

Assets: Increase

Liabilities: Increase

Owner's (or Stockholders') Equity: No Effect

9. The company purchases land by paying half in cash and signing a note payable for the other half.

Assets: Increase

Liabilities: Increase

Owner's (or Stockholders') Equity: No Effect

10. In May, Company X records the transaction by a debit to Accounts Receivable for $5,000 and a credit to Service Revenues for $5,000. What is the effect of this entry upon the accounting equation for Company X?

Assets: Increase

Liabilities: No Effect

Owner's (or Stockholders') Equity: Increase

11. In June, Company X receives the $5,000. What is the effect on the accounting equation and which accounts are affected at Company X?

Assets: No Effect

Liabilities: No Effect

Owner's (or Stockholders') Equity: No Effect

12. What is the effect on Client Q's accounting equation in May when Client Q records the transaction as a debit to Consultant Expense for $5,000 and a credit to Accounts Payable for $5,000?

Assets: No Effect

Liabilities: Increase

Owner's (or Stockholders') Equity: Decrease

13. What is the effect on Client Q's accounting equation in June when Client Q remits the $5,000? Also, which accounts will be involved?

Assets: Decrease

Liabilities: Decrease

Owner's (or Stockholders') Equity: No Effect

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