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Discuss How the Following Transactions Affect Accounts and Financial Statements

question 47

Essay

Discuss how the following transactions affect accounts and financial statements.(1)Jillian Robb invested $30,000 cash in Profile Design Co.(2)Profile Design CoProfile Design Co. purchased equipment for $19,000 and signed a note payable.


Definitions:

Merchandise Inventory

The goods available for sale to customers in retail or wholesale businesses, valued at lower of cost or market value on the balance sheet.

Credit Sales

Transactions where goods or services are provided to a customer with an agreement to pay at a later date.

Operating Expenses

Expenses related to the normal operations of a business, excluding the cost of goods sold.

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