Required a. Indicate the accounts that would be debited and credited for each of the following unrelated transactions. (1) Acquired cash from the issue of common stock. (2) Provided services for cash. (3) Paid cash for salaries expense. (4) Purchased supplies for cash. (5) Paid in advance for two-year lease on office space. (6) Provided services on account. (7) Recognized expense for prepaid rent that had been used up by the end of the accounting period. (8) Recorded accrued salaries at the end of the accounting period. b. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. The first event is shown as an example. (Explain how each event affects the accounting equation by placing + for increase, - for decrease, +/- for increase and decrease, or leave blank for no effect under each of the components of the accounting equation. In the Statement of Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, or leave blank.)
Required a. Indicate the accounts that would be debited and credited for each of the following unrelated transactions. (1) Acquired cash from the issue of common stock. (2) Provided services for cash. (3) Paid cash for salaries expense. (4) Purchased supplies for cash. (5) Paid in advance for two-year lease on office space. (6) Provided services on account. (7) Recognized expense for prepaid rent that had been used up by the end of the accounting period. (8) Recorded accrued salaries at the end of the accounting period. b. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. The first event is shown as an example. (Explain how each event affects the accounting equation by placing + for increase, - for decrease, +/- for increase and decrease, or leave blank for no effect under each of the components of the accounting equation. In the Statement of Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, or leave blank.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required
a. Indicate the accounts that would be debited and credited for each of the following unrelated transactions.
(1) Acquired cash from the issue of common stock.
(2) Provided services for cash.
(3) Paid cash for salaries expense.
(4) Purchased supplies for cash.
(5) Paid in advance for two-year lease on office space.
(6) Provided services on account.
(7) Recognized expense for prepaid rent that had been used up by the end of the accounting period.
(8) Recorded accrued salaries at the end of the accounting period.
b. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash
flows. The first event is shown as an example. (Explain how each event affects the accounting equation by placing + for increase, - for
decrease, +/- for increase and decrease, or leave blank for no effect under each of the components of the accounting equation. In the
Statement of Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, or
leave blank.)
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