Below Are Listed Several Transactions That a Business May Enter

question 10

Essay

Below are listed several transactions that a business may enter into.
1. Provide services to customers on account
2. Purchase land by paying cash
3. Purchase a fire insurance policy that will provide coverage for a two-year period
4. Acquire cash by issuing common stock
5. Recognize expense for amount of office supplies that had been used during the period
6. Receive payment from a customer for services that will be provided over the next six months
Required:
a) In the table below, indicate the accounts that would be debited and credited for each of the preceding transactions. b) Show how each transaction affects the financial statements by placing a + for increase, - for decrease, and NA for not affected under each component in the horizontal financial statements model shown below. In the Cash Flow column, use the letters OA for operating activities, IA for investing activities, and FA for financing activities.

Grasp the method for calculating inflation rates using the CPI and understand the concept of deflation.

Recognize the CPI's limitations, including the introduction of new goods and unmeasured quality changes.

Understand how consumer price indices (CPI) are calculated and interpreted.

Analyze changes in real versus nominal income or expenditures over time.

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Definitions:

PV Function

In financial analysis, a function used to calculate the Present Value of a series of future payments or receivables, discounted at a given interest rate.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.

Defined Name

A feature in spreadsheet software that allows users to assign a meaningful name to a cell, range of cells, formula, or constant value.

Scope

The extent to which variables, functions, and declarations are visible or able to be used within a portion of a program.