For each of the following transactions, indicate whether it increases (I), decre
ID: 2379962 • Letter: F
Question
For each of the following transactions, indicate whether it increases (I), decreases (D), or has no effect (NE) on the total dollar amount of each of the elements of the accounting equation.
Transactions Assets = Liabilities + Stockholders
following transactions, indicate whether it increases (I), decreases (D), or has no effect (NE) on the total dollar amount of each of the elements of the accounting equation. Transactions Assets = Liabilities + Stockholders' Equity Example: Common stock is issued in exchange for cash Equipment is purchased for cash. Services are provided to customers on account. Services are provided to customers in exchange for cash. An account payable is paid off. Cash is collected on an account receivable. Buildings are purchased in exchange for a three-year note payable. Advertising bill for the month is paid. Dividends are paid to stockholders. Land is acquired by issuing shares of stock to the owner of the land.Explanation / Answer
1. Equipment is purchased for cash asset (NE) = Liabilities(NE) + Stockholders' Equity(NE)
2. Services are provided on account asset (I) = Liabilities(NE) + Stockholders' Equity(I)
3. Services are provided in exchange for cash asset (I) = Liabilities(NE) + Stockholders' Equity(I)
4. An account payable is paid off asset (D) = Liabilities(D) + Stockholders' Equity(NE)
5. Cash is collected on an account receivable asset (NE) = Liabilities(NE) + Stockholders' Equity(NE)
6. Buildings are purchased in exchange for a three-year note payable asset (I) = Liabilities(I) + Stockholders' Equity(NE)
7. Advertising bill for the month is paid asset (D) = Liabilities(NE) + Stockholders' Equity(D)
8. Dividends are paid to stockholders asset (D) = Liabilities(NE) + Stockholders' Equity(D)
9. Land is acquired by issuing shares of stock to the owner of the land asset (I) = Liabilities(NE) + Stockholders' Equity(I)
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