Match Each Transaction with Its Effect on the Accounting Equation

question 77

Multiple Choice

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Paid wages

• A)Increase assets, increase liabilities
• B)Increase liabilities, decrease owner's equity
• C)Increase assets, increase owner's equity
• D)No effect
• E)Decrease assets, decrease liabilities
• F)Decrease assets, decrease owner's equity

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Definitions:

Equity

The value of an owner's interest in a property or business, calculated as the difference between the assets and the liabilities.

Capital Balance

The amount of money that stakeholders have invested in a company. This can also refer to the equity section of a company's balance sheet.

Income-Sharing Ratio

The agreed-upon distribution of income or profits among partners in a business, often expressed as a proportion or percentage.

Noncash Assets

Assets that are not in the form of cash or easily convertible into cash, such as property, plant, and equipment.