Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.
Increase = I Decrease = DNot Affected = NA
A transaction recorded as a debit to Furniture and a credit to Cash.
Definitions:
Gross Method
An accounting method for recording purchases at the total invoice cost without deducting any cash discounts at the time of purchase.
Perpetual Inventory System
An accounting method that continuously updates the quantity and cost of inventory as purchases and sales are made.
Merchandise
Products or goods that are bought, sold, or traded within the retail or wholesale market.
Inventory Shrinkage
The loss of products between purchase from supplier and sale to customer, often due to theft, damage, or errors.
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