1. For each of the following items, analyze how it affects Assets, Liabilities,

Question

1. For each of the following items, analyze how it affects Assets, Liabilities, Equity, Revenues, Expenses and Income. A company makes an entry to A. recognized $12,000 of interest that had been earned but not yet received B. deferred $1,850 of rent that was paid but not yet incurred C. recognized a previously deferred expense of $1,340 D. deferred an expense of $2,900 Complete the table below indicating if the financial element Increased (+), Decreased (G) or there was No Effect (NE). If possible, provide the amount of the increase or decrease. Expenses Income Revenues E | Item # Assets Liabilities Equity

Explanation / Answer

Item Assets Liabilities Equity Revenue Expenses Income Remarks A NE NE NE NE NE NE Increase in cash (Assets) and decrease in interest receivable (Assets) B NE NE NE NE NE NE Decrease in cash (Assets) and Increase in Prepaid expense (Assets) C -1340 +1,340 D +2,900 -2,900

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