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 133

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. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$
Baird Enterprises purchased equipment on account on January 1, 2014. Show how the purchase affected the financial statements. $\begin{array}{|l|l|l|l|l|l|}\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}\text { Net } \\\text { Income }\end{array} & \begin{array}{c}\text { Cash } \\\text { Flow }\end{array}\\\hline&&&\end{array}$

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Definitions:

Market Price

The ongoing market price for an asset or service available for purchase or sale.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

Average Total Assets

A measure calculated by averaging the total assets a company has at the beginning and end of the financial period, used to evaluate asset efficiency.

Net Sales

The amount of a company's gross sales minus its returns, allowances, and discounts.