When a company pays cash for a truck, what is the effect on theaccounting equation for that company?A. Increase assets and increase liabilities.B. Decrease assets and decrease liabilities.C. Increase assets and increase equity.D. No net change.

The correct answer is:D. No net change. Explanation:When a company pays cash for a truck, it is…

Answered: When a company pays cash for a truck,…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 34E

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Similar questions

What effect will the cash payment of an account payable have on the Balance Sheet? Group of answer choices Decrease an asset and decrease stockholders’ equity Decrease an asset and decrease a liability Increase an asset and increase a liability Increase one asset and decrease another asset
Cash flow from operating activities is increased by: a. depreciation and amortization b. a decrease in accounts receivable c. a decrease in inventory d. an increase in accounts payable e. all of these
The cash payment of an account payable will have the following impact on the accounting equation. Group of answer choices Decrease an asset and decrease a liability Increase one asset and decrease another asset Increase an asset and increase a liability Decrease an asset and decrease stockholders’ equity
Which of the following has a different effect on net profit than it does on cashflow? A.Cash sale to customer B.Payment for wages C.Payment for rent D.Depreciation of equipment
Which of the following transactions violates the balance sheet equation? (check all that apply) Increase cash and reduce inventory (a non-cash asset) Reduce cash and reduce a liability Increase revenues and reduce a liability Increase cash and reduce a liability Increase cash and increase an expense
Which of the following type of transaction will NOT cause a business cash inflow?A. decrease in assets other than cash.B. increase in liabilities.C. decrease in liabilities.D. increase in owner’s equity.
which of the following statements regarding free cash flow is true? a.Free cash flow measures the operating cash flow of a company after the purchase of inventory. b.Free cash flow is a valuable tool for evaluating net income. c.Free cash flow ignores productive capacity. d.None of these choices are correct.
Which of the following transactions violates the balance sheet equation? (check all that apply) a. Reduce cash and reduce a liability b. Increase revenues and reduce a liability c. Increase cash and increase an expense d. Increase cash and reduce inventory (a non-cash asset) e. Increase cash and reduce a liability
General Account
Which of the following would indicate a cash payment? a. An increase in prepaid expenses b. Selling equipment at a loss c. A decrease in inventory d. A decrease in accounts receivable
Which of the following statements is true about the Days' Cash on Hand ratio? a.It is not useful in comparing different businesses to one another. b.It may be useful in determining whether a business is able to meet its cash commitments. c.It uses all current assets in the numerator of the ratio. d.The only operating expense used in the denominator of the ratio is depreciation expense
Balance Sheet 3-Dudes, Inc. Liabilities & Owners' Equity: Assets: 2021 2022 $22,000 $18,000 $26,000 $30,000 $28,000 $31,000 $76,000 $79,000 2022 $45,000 $220,000 $195,000Notes Pay $27,000 $292,000 $246,000Total CL 2021 Cash $21,000Accts Pay Accts. Rec. $30,000Other CL Inventories Total CA $600,000 $570,000LT Debt -$210,000 -$190,000Total Liab $390,000 $380,000 $285,000 $250,000 $361,000 $329,000 PP&E Depreciation Net PP&E $80,000 $80,000 Equity $626,000Ret Earn. Total equity Total Liab+EQ $241,000 $217,000 $321,000 $297,000 $682,000 $626,000 Total Assets $682,000 Simplified Income Statement - 2022 3-Dudes, Inc $1,200,000 -$470,000 $730,000 Revenue Cost of Goods Sold Gross Profit Operating Expenses (G&A): Earnings before interest and taxes (EBIT) Interest charges: Earnings before taxes (EBT) Taxes -$260,000 $470,000 -$28,000 $442,000 -$132,600 $309,400 Net Income

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When a company pays cash for a truck, what is the effect on the accounting equation for that company? A. Increase assets and increase liabilities. B. Decrease assets and decrease liabilities. C. Increase assets and increase equity. D. No net change.