Question

Following is a list of effects of accounting transactions on the balance sheet equation: Assets = Liabilities + Stockholders’ equity.
a. Increase in assets, decrease in liabilities
b. Increase in assets, increase in liabilities
c. Decrease in assets, decrease in stockholders’ equity
d. Decrease in assets, decrease in liabilities
e. Increase in assets, decrease in assets
f. Increase in liabilities, decrease in stockholders’ equity
g. Decrease in assets, increase in liabilities
h. Decrease in liabilities, increase in stockholders’ equity
i. Increase in assets, increase in stockholders’ equity
j. None of these

Required
Which of the relationships previously identified by letter defines the accounting effect of each of the following transactions?
1. The adjusting entry to recognize periodic depreciation.
2. The adjusting entry to record Accrued Salaries.
3. The adjusting entry to record Accrued Interest Receivable.
4. The collection of interest previously accrued.
5. The settlement of an Account Payable by the issuance of a Note Payable.
6. The recognition of an expense that had been paid for previously. A “prepaid” account was increased on payment.
7. The earning of revenue previously collected. Unearned Revenue was increased when collection was made in advance.



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  • CreatedFebruary 20, 2015
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