Show the Effect of Each of the Transactions Below on Total

question 94

Essay

Show the effect of each of the transactions below on total assets and the current ratio by using one of the symbols in each box to complete the table.If the numerator and denominator of a ratio both increase or both decrease by the same amount,the effect of the event on the ratio is "O" or no effect.
$\begin{array}{ll} \underline {\text { Effect } }& \underline {\text { Symbol }} \\\text { Increase } &+ \\\text { Decrease } &- \\\text { No effect } &\mathrm{N}\\\text { Insufficient Data } &\mathrm{O}\end{array}$ $\begin{array}{|l|l|l|}\hline & \text { Effect on } & \text { Effect on the } \\\hline & \text { Total Assets } & \text { Current Ratio } \\\hline \text { Cashreceived from customers for accountsreceivable balances dule } & & \\\hline \text { Cash sales of long term assetsfor an amount in excess of cost } & & \\\hline \text { Declaration and payment of cash dividends } & & \\\hline \text { Payment of interest expense } & & \\\hline \text { Purchase of long term assets for cash } & & \\\hline \text { Purchase of office supplies for cash } & & \\\hline\end{array}$

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Definitions:

Equivalent Units

A method used in cost accounting to express partially completed goods in terms of complete units.

Units Finished

The quantity of completed products available for sale or distribution at the end of an accounting period.

Conversion Costs

Combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished goods.

Conversion Cost

The combined costs of direct labor and overhead expenses incurred to convert raw materials into finished products.