Several Transactions Are Listed Below,with an Expanded Accounting Equation Stated

question 96

Essay

Several transactions are listed below,with an expanded accounting equation stated to the right side of each.Use the following identification codes to indicate the effects of each transaction on the accounting equation: I = Increase;D = Decrease;NE = No Effect.Write your answers in the space provided under the accounting equation,being sure to include an identification code for each element of the accounting equation.
$\begin{array}{|l|l|l|l|l|l|l|l|l|}\hline&&&&&&\text {Contributed}&&\text {Retained}\\\hline &&\text { Assets }&=&\text { Liabilities }&+&\text { Capital }&+&\text { Equity}\\\hline \text { A) } & \text { Issue common stock } \\\hline \text { B) } & \text { Borrow money from the bank } \\\hline \text { C) } & \text { Purchase land for cash } \\\hline \text { D) } & \text { Purchase a 1-year insurance policy } \\\hline \text { E) } & \text { Purchase supplies on credit } \\\hline \text { F) } & \text { Services are provided for cash. } \\\hline \text { G) } & \text { Receive cash in advance for } \\&\text { services to be provided next week. }\\\hline \text { H) } & \text { Pay utilities } \\\hline \text { I ) } & \text { Pay employee salaries } \\\hline\end{array}$

Recognize the difference between a company’s operating cycle and fiscal year.

Understand the classification and characteristics of current assets.

Comprehend the process and significance of closing entries and how they relate to the owner's capital.

Grasp the concept and duration of an operating cycle in a business.

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Definitions:

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