Indicate the net effect (+ for increase; for decrease; 0 for no effect) of each of
Question:
Indicate the net effect (+ for increase; – for decrease; 0 for no effect) of each of the following transactions on each part of the accounting equation, Assets = Liabilities + Equity. For example, for payment of an accounts payable balance, A (–) = L (–) + E (0).
A. Sale of merchandise to customer on account
B. Payment on note payable
C. Purchase of equipment for cash
D. Collection of accounts receivable
E. Purchase of supplies on account
Step by Step Answer:
Step 1 Introduction The accounting equation states that assets equal to sum of liabilities ...View the full answer
Principles Of Accounting Volume 1 Financial Accounting
ISBN: 9781593995942
1st Edition
Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, OpenStax
Related Video
The accounting equation is a formula that shows the sum of a company\\\'s liabilities and shareholders\\\' equity are equal to its total assets (Assets = Liabilities + Equity). The clear-cut relationship between a company\\\'s liabilities, assets, and equity is the backbone of double-entry bookkeeping.
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