Virginian Enterprises received a bill from Livingstone Landscaping for $14,500. Theypaid $5,000 on receipt of the bill and agreed to pay the remainder by the end of themonth. For Virginian Enterprises, this transactiona. decreases assets, liabilities and stockholder's equity.b. has no effect on the basic accounting equation.c. increases assets and liabilities.d. increases liabilities; decreases assets and stockholders' equity.

INTRODUCTION: Equity, also known as shareholders' equity (or owners' equity for privately owned…

Answered: Virginian Enterprises received a bill…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to a.decrease an asset, decrease a liability b.increase an asset, increase owner's equity c.increase an asset, decrease another asset d.increase an asset, increase a liability
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7. Purchased more office supplies from General Office Company for $1,500 on account. Identify the two parties to this transaction. Describe the activity of each party Which party is being accounted for Describe the impact on company value Maquoketa Services adds a liability (Accounts Payable) for $1,500 pertaining to office supplies. Describe the portions of the transaction occurring currently and describe portions of transaction that is being deferred (postponed) Was cash exchanged in the transaction?
If a business makes a gross profit during a financial or trading year ( select appropriate answer) A) There is no need to produce a trading account for that business B) It does not necessarily follow that a net profit will also be made during the financial or trading year. C) Its owners will be able to take drawings or earn dividends D) It follows that a net profit will also be made during that financial or trading year
13. On August 1, XYZ Inc. paid $5,000 in advance for September, October, and November rent. What would be the effect on the accounting equation for the transaction? a Increase Equity and decrease equity b. Increase Assets and decrease assets Increase Liabilities decrease assets d. There is no effect on the accounting equation 14. Assume Jacob performs a service and gets paid $100 later. Under what accounting method would this transaction fall under? a. Cash Basis of Accounting b. Accrual Basis of Accounting C. Both Cash Basis and Accrual Basis of Accounting d. It would not fall under any accounting method 15. Assume Jennifer decides to perform a service and gets paid $70 cash. Under what accounting method would this transaction fall under? a. Accrual Basis of Accounting b. Cash Basis of Accounting C. Both Cash Basis of and Accrual Basis of Accounting d. It would not fall under any accounting method
The accountant at Allied Client inadvertently recorded depreciation expense as $57,000 instead of $75,000. Which of the four primary financial statements (i.e., Income Statement, Statement of Changes in Equity, Balance Sheet, and Statement of Cash Flows) will be incorrect if this error is not corrected before the statements are issued?
The receipt of $8,000 cash for fees earned was recorded by Mother Earth Consulting as an increase in cash of $8,000 and a decrease in retained earnings (revenue) of $8,000. What is the effect of this error on the accounting equation? A. Total assets will exceed total liabilities and stockholders’ equity by $8,000 B. Total assets will be less than total liabilities and stockholders’ equity by $8,000 C. Total assets will exceed total liabilities and stockholders’ equity by $16,000 D. The error will not affect the accounting equation.
Jackson Electric Services incurred $800 as a repair expense and paid for it in cash. This transaction will ________. A. increase the assets of the business B. decrease the liabilities of the business C. decrease the stockholders' equity of the business D. increase the liabilities of the business
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In January, X Company purchased some equipment with $100,000 that it borrowed from a local bank. The accountant recorded the transaction as an increase in Inventories and an increase in Accounts Payable. As a result, on the January balance sheet, Accounts Payable was understated. Cash was understated. Total liabilities were understated. Retained Earnings was overstated. Inventories were overstated. Total assets were understated.
Saddleback Company paid off $46,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? Multiple Choice O O Assets decrease $46,000; equity decreases $46,000. Assets decrease $46,000; liabilities decrease $46,000. Assets decrease $46,000; liabilities increase $46,000. Liabilities decrease $46,000; equity increases $46,000. Assets increase $46,000; equity increases $46,000. 11
What is the effect of a company performing services for $8,000 on account? Explain why. a. Net effect is zero because revenues increase and decrease by $8,000 b. Revenues increase by $8,000 and assets increase by $8,000 c. Revenues increase by $8,000 and liabilities increase by $8,000 d. Revenues increase by $8,000 and stockholders’ equity increases by $8,000

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