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 30

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. Assume use of a perpetual inventory system. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$
Youkilis Co. paid $800 cash for freight charges to obtain merchandise inventory from a supplier. Show how the transaction would affect Youkilis's financial statements. $\begin{array} {| l| l| l| l| l| l| l| }\text { Assets}&\text { Liabilities }&\text {Equity}&\text { Revenues}&\text { Expenses }&\text { Net Income }&\text { Cash }\\\hline &&&&&\end{array}$

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Definitions:

Issuance

The process of making securities available for sale to the public or the act of issuing new shares of stock by a company.

Cash Flows

The total amount of money being transferred into and out of a business, especially as it affects liquidity.

Investing Activities

Financial transactions involving the purchase or sale of long-term assets and investments, a component of cash flow statements.

Operating Activities

Operating activities are the day-to-day functions of a business related to producing and selling its goods or services, which are reflected in its earnings.