Describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation: 1. Received cash in exchange for common stock, $30,000. 2. Paid advertising expense, $3,500. 3. Purchase supplies on account, $2,500. 4. Billed customers for delivery services on account, $18,750. 5. Received cash from customers on account, $14,150. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expenses. To illustrate, the answer to (1) follows: 1. Asset (Cash) increases by $30,000; Common Stock increases by $30,000.
Describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation: 1. Received cash in exchange for common stock, $30,000. 2. Paid advertising expense, $3,500. 3. Purchase supplies on account, $2,500. 4. Billed customers for delivery services on account, $18,750. 5. Received cash from customers on account, $14,150. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expenses. To illustrate, the answer to (1) follows: 1. Asset (Cash) increases by $30,000; Common Stock increases by $30,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the
1. Received cash in exchange for common stock, $30,000.
2. Paid advertising expense, $3,500.
3. Purchase supplies on account, $2,500.
4. Billed customers for delivery services on account, $18,750.
5. Received cash from customers on account, $14,150.
Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expenses.
To illustrate, the answer to (1) follows:
1. Asset (Cash) increases by $30,000; Common Stock increases by $30,000.
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