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crimeas [40]
3 years ago
7

Select a transaction that effects the accounting equation as follows:________

Business
1 answer:
faltersainse [42]3 years ago
8 0

Answer:

A. The company pays cash toward an account payable.  

Decreases an asset and decreases a liability.  

B. The company purchases equipment on credit.  

Increases an asset and increases a liability.  

C. The owner invests cash in the business in exchange for its common stock.  

Increases an asset and increases equity.

D. The company pays cash dividends to shareholders.  

Decreases an asset and decreases equity.  

E. The company purchases supplies for cash.  

Increases an asset and decreases an asset.  

F. The company provides services for cash.

Increases an asset and decreases an asset.  

Explanation:

A. The company pays cash toward an account payable.  

Decreases an asset and decreases a liability.  

When a company pays cash - an asset is decreasing because cash is a current asset and it is flowing out; while 'account payable' which is a current liability, is being settled - hence reducing

B. The company purchases equipment on credit.  

Increases an asset and increases a liability.  

When a company purchases equipment on credit - an asset is increasing because equipment is a fixed asset and it is coming in; while 'account payable' which is a current liability, is being generated - hence increasing

C. The owner invests cash in the business in exchange for its common stock.  

Increases an asset and increases equity.

When a company owner invests into the business - an asset is increasing because cash is a current asset and it is coming in; while 'Equity' which is common stock, is being generated - hence increasing

D. The company pays cash dividends to shareholders.  

Decreases an asset and decreases equity.  

When a company pays dividends - an asset is decreasing because cash is a current asset and it is going out; while 'retained earnings' which is part of equity, is being reduced.

E. The company purchases supplies for cash.  

Increases an asset and decreases an asset.  

When a company purchases supplies on credit - an asset is increasing because 'inventory' is a current asset and it is coming in; while 'cash' which is also an asset, is being paid out - hence decreasing

F. The company provides services for cash.

Increases an asset and decreases an asset.  

When a company provides service for cash - an asset is increasing because cash which is a current asset is coming in; while 'cash' which is a current asset, is being paid out at the same time for salaries to employees who rendered the service to the client - hence decreasing

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Answer:

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Which of the following is a condition necessary to exclude an obligation from current liabilities? Entry field with incorrect an
lutik1710 [3]

Answer:

The answer is: Obligation that has a distant due date exceeding company's operating cycle.  

Explanation:

A current liability is a financial obligation due within one year (or one normal operation cycle).

So a financial obligation that has a due date that exceeds a company´s operating cycle should have been directly classified as a long term liability (or a non current liability) in the first place. It simply is not a current liability that is changed into a long term liability, it always was a long term liability.

The other options represent the steps necessary for turning a current liability into a long term liability.

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  2. Demonstrate the ability to complete the refinancing.
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7 0
3 years ago
A firm has the following gross requirements for Item OF. Ordering costs are $60 per order and carrying costs are $0.50 per perio
aleksley [76]

Answer:

c. 120

Explanation:

The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The formula for Economic order quantity is represented by the formula:

EOQ = \sqrt{\frac{2*Demand*Ordering Cost}{Holding cost} }

EOQ = \sqrt{\frac{2*240*60}{0.5} }

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5 0
3 years ago
Your company incurs a cost for factory rentfactory rent​, ​which, in the short​ run, is fixed. What happens to this cost in the
mixas84 [53]

Answer:

A. becomes a variable cost

Explanation:

Fixed costs are the expenses that remain constant in a period. During the period under review, fixed costs do not change regardless of the level of output. Fixed costs are mostly made up of overheads such as rent , depreciation, and administrative salaries.

Fixed cost remains constant in a particular financial year. In the long run,  business budgets and projections tend to change, resulting in changes to the fixed cost. In other words, in the long run, fixed costs will change. Therefore, in the long run, all costs are variable expenses.

5 0
3 years ago
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