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Concept explainers
Transaction analysis (Learning Objective 5) 5-10 min.
Presented here are nine transactions and the analysis used to account for them. Evaluate each of the suggested accounting treatments, and indicate whether it is true or false.
- 1. Received cash of $41,000 from the stockholders, who bought stock in the business
Answer. Increase asset, increase
stockholders' equity. ______ True ______ False - 2. Paid $600 cash to purchase supplies
Answer. Increase asset, increase stockholders' equity. ______ True ______ False
- 3. Earned service revenue on account, $1,200
Answer. Increase asset, increase
retained earnings . ______ True ______ False - 4. Purchased office furniture on account at a cost of $450
Answer. Increase asset, increase liability. _____ True _____ False
- 5. Received cash on account, $1,500
Answer. Increase asset, decrease asset. _____ True _____ False
- 6. Paid cash on account, $175
Answer. Increase asset, increase liability. _____ True _____ False
- 7. Sold land for $68,000 cash, which was the cost of the land.
Answer Increase asset, decrease asset. _____ True _____ False
- 8. Performed services and received cash of $825
Answer Increase asset, increase revenue. _____ True _____ False
- 9. Paid monthly office rent of $1,500
Answer Decrease asset, increase stockholders' equity. _____ True _____ False
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Chapter 1 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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