Question

Corcoran Consulting (CC) provides end user support for custom made wood pulp processing software. During the month of July, they had only one transaction. CC purchased and paid for an industrial printer that they plan on using for the next several years. How did this transaction Impact the total of their Asset(A), Liability(L), and Stockholder's Equity (SE) accounts respectively? A-Down, L- Up, SE - No Change O A - Up, L - No Change, SE - Up A - No Change, L- Up, SE - Down A- No Change, L- No Change, SE - No Change

Answer 1

Answer -

A - No Change, L - No Change, SE - No Change

Explanation -

In the given question Corcoran Consulting purchased Industrial Printer and made payment. Through this transaction there are Assets increased in the form of Industrial Printer at the same time Asset decreased in terms of payment. Hence these transaction has increased as well as decreased the assets.

Hence there will no be any changes to the assets side due to one debit and one credit effect.

For Example - Purchase of Assets for Cash of $20,000.

+ Transaction Assets Purchased Paid Cash Accounting Equation Assets Libilities $ 20,000 No Effect $(20,000)| No Effect Equity No Effect No Effect