Liabilities Stockholde Equity below is true regarding the effect of incorrectly including the issuance of Common Stock in the Retained Earnings the Assets column? no effect as Assets still equal Liabilities plus Stockholder's Equity d Retained Earnings will be overstated, the accounting equation will be in balance. be understated and Stockholder's Equity will be overstated. its and Stockholder's Equity will be understated.
Liabilities Stockholde Equity below is true regarding the effect of incorrectly including the issuance of Common Stock in the Retained Earnings the Assets column? no effect as Assets still equal Liabilities plus Stockholder's Equity d Retained Earnings will be overstated, the accounting equation will be in balance. be understated and Stockholder's Equity will be overstated. its and Stockholder's Equity will be understated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Revise your worksheet to the accounting equation and update for the new transaction values below, and then answer the questions
that follow.
The following transactions took place at a newly formed company:
1. Started the company by issuing connon stock
2. Paid six months of rent in advance
3. Provided services to customers on account
4. Purchased supplies on account
5. Paid employees' salaries for the current month
6. Paid dividends to stockholders
$ 51,200
7,280
13,000
2,280
6,200
4,200
Required:
1 Based on your new values, enter the total of Assets, Liabilities, and Stockholders' Equity:
Stockholdes Equity
Assets = Liabilities +
2. What statement below true regarding the effect of incorrectly including the issuance of Common Stock in the Retained Earnings
column instead of the Assets column?
O There will no effect as Assets still equal Liabilities plus Stockholder's Equity.
O Assets and Retained Earnings will be overstated, the accounting equation will be in balance..
O Assets will be understated and Stockholder's Equity will be overstated.
Both Assets and Stockholder's Equity will be understated.
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