Venus, Inc. paid $12,000 on accounts payable. How does this transaction affect the accounting equation of Venus? A) assets decrease by $12,000 and equity increases by $12,000 B) assets decrease by $12,000 and liabilities decrease by $12,000 C) assets increase by $12,000 and equity decreases by $12,000 D) assets increase by $12,000 and liabilities increase […]
Indicate the effects on the accounting equation of the following business transactions of Mayflower Service Corporation for b) to d) below. Use proper account titles. Transaction a) is answered as a guide a) Received cash from Don Jones; issued common stock to him. What will be an ideal response ANSWER Increase asset (Cash); Increase equity […]
Ace, Inc. had the following transactions during June: Performed services for $5,000 on account; received cash on account, $7,000; paid $600 for repair expense; paid $2,000 to a supplier that it owed from the previous month What is the combined effect on Cash of the June transactions? A) $4,400 increase B) $4,400 decrease C) $7,000 […]
Zetom Company receives a bill from one of its suppliers for services received and will pay the supplier next month. How does the receipt of the bill from the supplier affect the accounting equation of Zetom? A) assets and equity decrease B) liabilities increase and equity decreases C) assets and liabilities increase D) liabilities and […]
Myers Landscaping Corporation performs lawn mowing services for its customers. Payments for the current month’s services are expected to be received next month. How does this transaction affect the accounting equation of Myers Landscaping? A) liabilities increase and equity decreases B) assets and equity increase C) assets and equity decrease D) liabilities and equity increase […]
Bliss Corporation settles a liability by making a payment in cash. How does paying this liability affect the accounting equation of the business? A) assets and liabilities decrease B) liabilities decrease and equity increases C) assets and liabilities increase D) assets increase and equity decreases ANSWER A
Murphy Corporation had originally purchased land for $38,000. It later sold it for $38,000 in cash. Which of the following is true of the effect of the sale of land on the accounting equation? A) assets increase and liabilities decrease by $38,000 B) assets and equity increase by $76,000 C) assets increase by $38,000; equity […]
Accord Corporation purchased land for $100,000 by making a cash payment of $30,000 and promising to pay the remaining amount in a later accounting period. What is the net effect of this transaction on Accord’s accounting equation? A) assets increase by $100,000 and liabilities decrease by $30,000 B) assets increase by $100,000 and liabilities decrease […]
Exchange Corporation collected $8,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Exchange? A) assets increase by $8,000; liabilities decrease by $8,000 B) assets increase by $8,000; assets decrease by $8,000 C) assets increase by $8,000; liabilities increase by $8,000 D) assets increase […]
Lush Lawns Corporation earned $1,000 for lawn mowing services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction? A) Accounts Payable B) Supplies C) Cash D) Accounts Receivable ANSWER D
