After reconciling its bank account, Addy Equipment Company made the following adjustments to its cash account: 

Event No. Event Description
1. Recognized NSF check from Wilson
2. Corrected understatement of expense
3. Recognized bank service charge
4. Recognized bank collection of an account receivable
5. Recognized interest revenue

Required
Identify the event depicted in each adjustment as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each adjustment affects the accounting equation by placing a + for increase, − for decrease, or NA for not affected under the following components of the accounting equation. The first event is recorded as an example.

Transcribed Image Text:

Stockholders' Equity Event No. Common Stock Retained Earnings Type of Event Liabilities Assets NA 1. +/- AE NA