As a manager of a department store, you must deal with a variety of business transactions. Place the letter of each of the following transactions next to the effect it has on the accounting equation.
a. Paid cash to the stockholders as a distribution of earnings.
b. Paid cash to purchase land for building site.
c. Paid cash on an account payable.
d. Sold stock to stockholders.
e. Received cash from the bank in exchange for a note payable.
_____ 1. Increase an asset and increase stockholders’ equity.
_____ 2. Increase an asset and increase a liability.
_____ 3. Increase one asset and decrease another asset.
_____ 4. Decrease an asset and decrease stockholders’ equity.
_____ 5. Decrease an asset and decrease a liability.