Homework Answers
| The Basic Principle of financial accounting is the Accounting Equation. |
| The Accounting Equation is Assets = Liabilities + Equity |
| Assets are resources controlled by the firm because of past transactions that are expected to provide future benefits. |
| Liabilities are the obligations as a result of past events that are expected to require an outflow of economic resources |
| Equity is the residual interest in the assets of the firm after deducting the liabilities. Equity consists of contributed capital and retained earnings |
In this case purchase of building is Assets and the Promissory note issued is a liabilities. The accounting entry will be:
Building (Dr) XXX
Notes Payable (Cr) XXX
Hence, there will be increase in Assets and also increase in liabilities.
The Correct answer will be increase assets; increase liabilities.
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6) The purchase of a building using a promissory note with a term of 15 years...
Indicate the effect of the following transaction on the elements of the accounting equation. Purchased land...
Indicate the effect of the following transaction on the elements of the accounting equation. Purchased land by signing a nine-month, non-interest-bearing note payable. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease Question 2 3 pts Received $12,000 cash for services provided to a customer. debit accounts receivable; credit fees earned debit cash; credit fees earned debit fees earned; credit cash debit cash; credit supplies expense Account used to record amounts...
3) The payment of an amount owed to a supplier would: A) have no effect on...
3) The payment of an amount owed to a supplier would: A) have no effect on total assets or liabilities. B) increase owner's equity and liabilities. C) decrease net income and increase assets. D) decrease assets and liabilities. 4) The accounting equation can be stated as: A) Assets Liabilities - Owner's Equity B) Assets - Liabilities Owner's Equity. C) Liabilities Assets+ Owner's Equity. D) Owner's Equity Assets+ Liabilities.
Question 15 0/1 pts A company purchased a building worth $500,000 by paying $50,000 in cash...
Question 15 0/1 pts A company purchased a building worth $500,000 by paying $50,000 in cash and acquiring a bank loan for the remainder. The effect on the accounting equation is: Increase in assets and liabilities by $500,000 Decrease in assets and liabilities by $50,000 Increase in assets and liabilities by $450,000 Decrease in assets and liabilities by $450,000
Transaction Analysis Assignment Last name Under the double-entry accounting system, when a financial transaction occurs, it...
Transaction Analysis Assignment Last name Under the double-entry accounting system, when a financial transaction occurs, it alects at least two accounts. This is demonstrated by looking at the basic accounting equation or the expanded accounting equation and conducting a transaction analysis using these equations. The expanded accounting equation is particularly helpful because it allows us to see the effect when the transaction involves revenues and/or expenses, as well as transactions that affect owner's capital of Owner's withdrawals Basic Accounting Equation...
QUESTION 6 Using the following key, indicate how the following transactions affect the accounting equation: Record...
QUESTION 6 Using the following key, indicate how the following transactions affect the accounting equation: Record monthly credit sales. OA. A Increase Assets and Increase SHE B Increase Assets and Increase Liabilities ?. Decrease Assets and Decrease Liabilities O Increase in Liabilities and Decrease in SHE OE Decrease in Liabilities and Increase in SHE OF No effect on the accounting equation QUESTION 7 Using the following key, indicate how the following transactions affect the accounting equation: Record employee salaries that...
i) A Business owner takes money out of his business in the form of a loan...
i) A Business owner takes money out of his business in the form of a loan and gives the business a long-term promissory note. Which of the following would be the most conservative approach to treating this transaction from the point of view of a lender? A) Decrease assets and decrease equity by the amount of the note receivable. B) Decrease assets and decrease liabilities by the amount of the note receivable C) Increase liabilities and decrease equity by the...
Purchased office supplies on account. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's...
Purchased office supplies on account. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease Indicate the effect of the following transaction on the elements of the accounting equation. Paid creditors, on account assets increase; liabilities increase assets decrease; liabilities decrease assets decrease; liabilities increase assets decrease; owner's equity increase Question 9 3 pts List of the entire group of accounts maintained by a business. general journal chart of accounts T-account accounting...
MID TERM EXAM ACT 170 SDUIS WITNTER S1 2019 STUDENT NAME 1. Describe how accounts, debits,...
MID TERM EXAM ACT 170 SDUIS WITNTER S1 2019 STUDENT NAME 1. Describe how accounts, debits, and credits are used to record business transactions: 2. Why is the accounting system referred to as a Double Entry System? 3. What is the effect of Owner's Investments and Revenues and Owner's Drawings and expenses on Equity? 4. Explain the Summary of Debit and Credit Rules for the Balance sheet and Income Statement? 5 Debits increase assets and decrease liabilities. T/ F? 6....
On November 15, 20x2, Trink Ltd. paid $6819 to settle an account payable resulting from the...
On November 15, 20x2, Trink Ltd. paid $6819 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets decrease $6819, liabilities decrease $6819, and equity does not change o b. Assets increase $6819, liabilities increase $6819, and equity does not change C. Assets decrease $6819, liabilities decrease $6819, and equity decreases $6819 O d. Assets decrease...
On November 15, 20x2, Trink Ltd. paid $4847 to settle an account payable resulting from the...
On November 15, 20x2, Trink Ltd. paid $4847 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets increase $4847, liabilities increase $4847, and equity does not change b. Assets decrease $4847, liabilities do not change, and equity decreases $4847 c. Assets decrease $4847, liabilities decrease $4847, and equity does not change d. Assets decrease $4847,...
Indicate the effect of the following transaction on the elements of the accounting equation. Purchased land by signing a nine-month, non-interest-bearing note payable. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease Question 2 3 pts Received $12,000 cash for services provided to a customer. debit accounts receivable; credit fees earned debit cash; credit fees earned debit fees earned; credit cash debit cash; credit supplies expense Account used to record amounts...
3) The payment of an amount owed to a supplier would: A) have no effect on total assets or liabilities. B) increase owner's equity and liabilities. C) decrease net income and increase assets. D) decrease assets and liabilities. 4) The accounting equation can be stated as: A) Assets Liabilities - Owner's Equity B) Assets - Liabilities Owner's Equity. C) Liabilities Assets+ Owner's Equity. D) Owner's Equity Assets+ Liabilities.
Question 15 0/1 pts A company purchased a building worth $500,000 by paying $50,000 in cash and acquiring a bank loan for the remainder. The effect on the accounting equation is: Increase in assets and liabilities by $500,000 Decrease in assets and liabilities by $50,000 Increase in assets and liabilities by $450,000 Decrease in assets and liabilities by $450,000
Transaction Analysis Assignment Last name Under the double-entry accounting system, when a financial transaction occurs, it alects at least two accounts. This is demonstrated by looking at the basic accounting equation or the expanded accounting equation and conducting a transaction analysis using these equations. The expanded accounting equation is particularly helpful because it allows us to see the effect when the transaction involves revenues and/or expenses, as well as transactions that affect owner's capital of Owner's withdrawals Basic Accounting Equation...
QUESTION 6 Using the following key, indicate how the following transactions affect the accounting equation: Record monthly credit sales. OA. A Increase Assets and Increase SHE B Increase Assets and Increase Liabilities ?. Decrease Assets and Decrease Liabilities O Increase in Liabilities and Decrease in SHE OE Decrease in Liabilities and Increase in SHE OF No effect on the accounting equation QUESTION 7 Using the following key, indicate how the following transactions affect the accounting equation: Record employee salaries that...
Purchased office supplies on account. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease Indicate the effect of the following transaction on the elements of the accounting equation. Paid creditors, on account assets increase; liabilities increase assets decrease; liabilities decrease assets decrease; liabilities increase assets decrease; owner's equity increase Question 9 3 pts List of the entire group of accounts maintained by a business. general journal chart of accounts T-account accounting...
MID TERM EXAM ACT 170 SDUIS WITNTER S1 2019 STUDENT NAME 1. Describe how accounts, debits, and credits are used to record business transactions: 2. Why is the accounting system referred to as a Double Entry System? 3. What is the effect of Owner's Investments and Revenues and Owner's Drawings and expenses on Equity? 4. Explain the Summary of Debit and Credit Rules for the Balance sheet and Income Statement? 5 Debits increase assets and decrease liabilities. T/ F? 6....
On November 15, 20x2, Trink Ltd. paid $6819 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets decrease $6819, liabilities decrease $6819, and equity does not change o b. Assets increase $6819, liabilities increase $6819, and equity does not change C. Assets decrease $6819, liabilities decrease $6819, and equity decreases $6819 O d. Assets decrease...
On November 15, 20x2, Trink Ltd. paid $4847 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets increase $4847, liabilities increase $4847, and equity does not change b. Assets decrease $4847, liabilities do not change, and equity decreases $4847 c. Assets decrease $4847, liabilities decrease $4847, and equity does not change d. Assets decrease $4847,...
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