Specify in the the effect of each of the followin accounting events on assets, l

Question

Specify in the the effect of each of the followin accounting events on assets, liablilties and owners' equity. Use "I" for increase, "D" for decrease, "NA" or not applicable.

A: issued captial stock for cash
B: purchased supplies on open account
C: purchased office equipment for cash
D: returned some of the supplies purchased open account to the seller because the wrong iems were received.
E: obtaind a bankloa
F: purchased additional office equipment by making a cash down payment with the balacne owed on open account.


(A=L+OE)

Explanation / Answer

A. Issuing capital stock for cash - Increases assets (IA) and increases owner's equity (IOE) B. Purchasing supplies on open account - Increases assets (IA) and increases liabilities (IL) C. Purchasing office equipment for cash - No effect (N/A) as the purchase of office equipment increases assets and the outflow of cash decreases assets by the same amount D. Returning some of the supplies purchased open account to the seller because the wrong items were received - Decreases liabilities (DL) from returning the item and decreases assets (DA) from return of supplies E. Obtaining a bank loan - Increases assets (IA) from inflow of cash and increases liabilities (IL) from loan F. Purchasing additional office equipment by making a cash down payment with the balance owed on open account - Increases assets (IA) and increases liabilities (IL) from the balance owed on open account

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.