Answered: DENNIS, A SOLE TRADER, REPAID A BANK…

DENNIS, A SOLE TRADER, REPAID A BANK LOAN OF $10,000 WITH A PERSONAL CHEQUE OF $4,000 AND THE BALANCE WITH A BUSINESS CHEQUE. WHAT IS THE EFFECT OF THE TRANSACTION ON THE ACCOUNTING EQUATION?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 32CYBK

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Question

What is the effect of the transaction on the accounting equation?

DENNIS, A SOLE TRADER, REPAID A BANK LOAN OF
$10,000 WITH A PERSONAL CHEQUE OF $4,000 AND
THE BALANCE WITH A BUSINESS CHEQUE. WHAT IS THE
EFFECT OF THE TRANSACTION ON THE ACCOUNTING
EQUATION?

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