During the Month,a Company Enters into the Following Transactions

question 29

Essay

During the month,a company enters into the following transactions:
• Buys $4,000 of supplies on account.
• Pays $5,000 cash for new equipment.
• Pays off $3,000 of accounts payable.
• Pays off $1,500 of notes payable.
a)Analyze the effect of these transactions on the basic accounting equation.
b)Journalize these transactions.

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Definitions:

Cost Reconciliation Report

A document summarizing the differences between standard costs and actual costs of production.

Work In Process Inventory

An accounting term referring to the total cost of unfinished goods in production.

Costs Added

Costs added refer to the additional expenses incurred during a production process or business operation, which were not part of the initial cost estimates.

Units Transferred Out

In process costing, the total units moved from one production process or department to the next or to finished goods.