Adams Company Completed the Following Transactions During March

question 27

Essay

Adams Company completed the following transactions during March:
Purchased inventory on open account,$28,000.
Purchased $900 of supplies for cash.
Sold on open account for $35,000 merchandise that had cost $23,000.
Employees earned $6,000 during March and were paid $5,000.
Collected $30,000 from credit customers.
Paid $25,000 to suppliers for merchandise purchases.
Used up $700 of supplies during March.
Using the form shown below,indicate the effect of each event on the assets,liabilities,and owners' equity of Adams Company.Use + or increases and - for decreases.
Using debits and credits make the entries for the same events
(
A)

---

Definitions:

Agricultural Commodities

Agricultural commodities include products derived from farming such as grains, livestock, and other food products often traded in financial markets.

Completed-transaction Method

A method of recognizing revenue only when all activities related to a transaction are completed.

GAAP

Generally Accepted Accounting Principles, a set of rules and guidelines that companies follow to ensure their financial statements are consistent and transparent.

Right of Return

A policy that allows customers to return purchased goods within a specific period for a refund, exchange, or credit.