Examples: Receive payment in cash for outstanding account receivable Assets Liability Equity Increase Increase Increase Liability Equity Decrease Decrease Decrease 2. The company purchases land by paying half in cash and signing a note payable for the other half Assets Increase Increase Increase No effect No effect No effect Decrease Decrease Decrease No effect No effect No effect 3. Cash received in advance from client for services is recorded in unearned revenue. Assets Increase Decrease No effect Liability Increase Decrease No effect Equity Increase Decrease No effect
Examples: Receive payment in cash for outstanding account receivable Assets Liability Equity Increase Increase Increase Liability Equity Decrease Decrease Decrease 2. The company purchases land by paying half in cash and signing a note payable for the other half Assets Increase Increase Increase No effect No effect No effect Decrease Decrease Decrease No effect No effect No effect 3. Cash received in advance from client for services is recorded in unearned revenue. Assets Increase Decrease No effect Liability Increase Decrease No effect Equity Increase Decrease No effect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
For each of these transactions highlight the effects on the accounting equation of the business
Transcribed Image Text:Highlight the answer) (24 pts)
Examples: Receive payment in cash for outstanding account receivable
Assets
Liability
Equity
Increase
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Increase
2. The company purchases land by paying half in cash and signing a note payable for
the other half
Assets
Liability
Equity
Decrease
Decrease
Decrease
No effect
No effect
No effect
Decrease
Decrease
Decrease
No effect
No effect
No effect
3. Cash received in advance from client for services is recorded in unearned revenue.
Assets
Increase
No effect
Liability Increase
No effect
Equity
Increase
No effect
Transcribed Image Text:4. Pay next quarter rent in cash in advance
Assets
Increase
Decrease
Liability Increase
Decrease
Equity
Increase
Decrease
5. Accrued expenses
Assets
Liability
Equity
Increase
Increase
Increase
Decrease
Decrease
Decrease
No effect
No effect
No effect
No effect
No effect
No effect
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