Consider Each of the Following Accounting Events

question 155

Essay

Consider each of the following accounting events:
1)Debited cash and credited common stock.2)Debited accounts receivable and credited service revenue.3)Debited office supplies and credited accounts payable.4)Debited prepaid rent and credited cash.5)Debited cash and credited accounts receivable.6)Debited accounts payable and credited cash.7)Debited dividends and credited cash.8)Debited rent expense and credited prepaid rent.Required:For each of the events listed above, use the table shown below to:a)Identify the transaction giving rise to that event as asset source (AS), asset use (AU), asset exchange (AX), or claims exchange (CX)transaction.b)Show the effect of each transaction on the components of the accounting equation. Use "+" to signify an increase, "−" to signify a decrease, and "NA" to signify that a given element is not affected by the transaction. If one account increases and another account decreases within the same element, record "+/−" (i.e. an asset exchange transaction). Note that "Not Affected" means that the event does not affect that element of the financial statements.

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Definitions:

Good X

A term typically used in economics to denote a specific commodity or product in theoretical models and discussions.

Budget Constraint

A concept in economics that represents all the combinations of goods and services a consumer can afford given their income and the prices of goods and services.

Horizontal Axis

In a graph or chart, the x-axis that runs from left to right, commonly used to represent the independent variable.

Vertical Axis

A line or reference point on a graph or chart that typically represents the dependent variable or outcome in an analysis.