Indicate How Each Event Affects the Elements of Financial Statements $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$

question 9

Short Answer

Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$
Quimby Co. sells goods to customers with a three-year warranty. During 2014, Quimby sold $600,000 of goods. On December 31, 2014, Quimby made the appropriate year-end adjustment to record the warranty expense related to the goods sold during the year. Show the effects of the December 31, 2014 adjustment. $\begin{array}{|l|l|l|l|l|l|}\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}\text { Net } \\\text { Income }\end{array} & \begin{array}{c}\text { Cash } \\\text { Flow }\end{array}\\\hline&&&\end{array}$

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Definitions:

Brain Death

A medical condition characterized by the irreversible cessation of all functions of the brain, including the brain stem.

Vegetative State

A state in which an individual is conscious but lacks any evidence of consciousness due to extensive damage to the brain.

Coma

A deep state of prolonged unconsciousness in which a person cannot be awakened and cannot respond to stimuli, caused by illness or injury.

Advance Directives

Any description of what a person wants to happen as they die and after they die. This can include medical measures, visitors, funeral arrangements, cremation, and so on.