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ACCT ch. 2
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Terms in this set (13)
LO1: measurement process of external transactions
-use source documents to identify accounts affected by an external transaction
-analyze the impact of the transaction on the accounting equation
-assess whether the transaction results in a debit or credit to account balances
-record the transaction in a journal using debits and credits
-post transactions to the general ledger
-prepare a trial balance
LO2: buy land by signing note to the bank
assets increase=liabilities increase+equity no effect
LO2: purchase equipment for cash
assets no effect=liabilities no effect+equity no effect
LO2: issue stock for cash
assets increase=liabilities no effect+equity increase
LO2: pay account payable
assets decrease=liabilities decrease+equity no effect
LO2: receive cash in advance from customers
assets increase=liabilities increase+equity no effect
LO2: pay rent in advance with cash
assets no effect=liabilities no effect+equity no effect
LO2: delta company purchased an equipment by signing a note with the bank for $20,000. which if the following statements correctly show the effect of this transaction on the accounting equation?
-assets will increase by $20,000, liabilities will decrease by $20,000, and stockholders equity will remain unchanged
-Assets will increase by $20,000, liabilities will increase by $20,000, and stockholders' equity will remain unchanged
-Assets will decrease by $20,000, liabilities will increase by $20,000, and stockholders' equity will remain unchanged
-Liabilities will increase by $20,000, stockholders' equity will decrease by $20,000, and assets will remain unchanged
assets will increase by $20,000, liabilities will increase by $20,000, and stockholders equity will remain unchanged
LO2: Amber Corporation provided services to customers on account for $26,000. Which of the following statements correctly show the effect of this transaction on the accounting equation?
-Assets will decrease by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000
-Assets will increase by $26,000, liabilities will increase, and stockholders' equity will remain unchanged
-Assets will increase by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000
-Liabilities will decrease by $26,000, stockholders' equity will remain unchanged, and assets will increase by $26,000
Assets will increase by $26,000, liabilities will remain unchanged, and stockholders' equity will increase by $26,000
LO2: Beta Company paid utilities expense of $2,000 for the current month. Which of the following statements correctly show the effect of this transaction on the accounting equation?
-Liabilities will remain unchanged, assets will decrease by $2,000, and stockholders' equity will decrease by $2,000
-Liabilities will increase by $2,000, stockholders' equity will remain unchanged, and assets will increase by $2,000
-Assets, liabilities, and stockholders' equity will remain unchanged
-Liabilities will increase by $2,000, assets will increase by $2,000, and stockholders' equity will remain unchanged
Liabilities will remain unchanged, assets will decrease by $2,000, and stockholders' equity will decrease by $2,000
LO2: Microlith received $20,000 cash in advance from customers. Which of the following statements correctly show the effect of this transaction on the accounting equation?
-Assets will increase by $20,000, stockholders' equity will increase by $20,000, and liabilities will remain unchanged.
-stockholders' equity will remain unchanged, liabilities will increase by $20,000, and assets will increase by $20,000
-Liabilities will remain unchanged, assets will increase by $20,000, and stockholders' equity will increase by $20,000
-stockholders' equity will increase by $20,000, liabilities will increase by $20,000, and assets will remain unchanged
stockholders' equity will remain unchanged, liabilities will increase by $20,000, and assets will increase by $20,000
LO2: Bell Company purchased supplies for $700 cash. Which of the following statements correctly show the effect of this transaction on the accounting equation?
-Assets will increase by $700, liabilities will remain unchanged, and stockholders' equity will increase by $700
-Assets will increase by $700, stockholders' equity will remain unchanged, and liabilities will increase by $700
-Assets remain unchanged, liabilities remain unchanged, and stockholders' equity will remain unchanged
-Assets will remain unchanged, liabilities will increase by $700, and stockholders' equity will remain unchanged
Assets remain unchanged, liabilities remain unchanged, and stockholders' equity will remain unchanged
LO3:
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