Account Debited Account Credited Cash Cash Salaries expense Supplies Prepaid ren
ID: 2391579 • Letter: A
Question
Account Debited Account Credited Cash Cash Salaries expense Supplies Prepaid rent Accounts receivable [Service revenue Event (1) Acquired cash from the issue of common stock. (2) Provided services for cash (3) Paid cash for salaries expense (4) Purchased supplies for cash (5) Paid in advance for two-year lease on office space (6) Provided services on account. (7) Recognized expense for prepaid rent that had been used up by the end of the accounting period. Rent expense (8) Recog (9) Recorded accrued salaries at the end of the accounting period mmon stock Service revenue Cash Cash Cash Prepaid rent nized accrued interest revenue nterest receivable nterest revenue xpense Salaries payable 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 a horizontal statements model like the one shown below. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, and FA for financing activity. The first event is recorded as an example. (In the Cash Flows column, select "NA" if there is no effect.) Net Income Statement of Cash No. AssetsLiabilitiesEquity Revenue-Expenses Flows FA OA NA NA NA NA NA NAExplanation / Answer
No.
Assets
=
Liabilities
+
Equity
Revenue
-
Expenses
=
Net Income
Statement of Cash Flows
1
+
NA
+
NA
NA
NA
+
FA
2
+
NA
+
+
NA
+
+
OA
3
-
NA
-
NA
+
-
-
OA
4
+/-
NA
NA
NA
NA
NA
-
OA
5
+/-
NA
Na
NA
NA
NA
-
OA
6
+
NA
+
+
Na
+
NA
7
-
NA
-
NA
+
-
NA
8
+
NA
+
+
Na
+
NA
9
NA
+
-
NA
+
-
NA
Note
1) When Supplies are Purchased and Prepaid rent is paid in cash the amount of assets increase (prepaid rent and Supplies) will be equal to amount of decrease in assets (cash) so its effect on total asset is nil hence +/- .
No.
Assets
=
Liabilities
+
Equity
Revenue
-
Expenses
=
Net Income
Statement of Cash Flows
1
+
NA
+
NA
NA
NA
+
FA
2
+
NA
+
+
NA
+
+
OA
3
-
NA
-
NA
+
-
-
OA
4
+/-
NA
NA
NA
NA
NA
-
OA
5
+/-
NA
Na
NA
NA
NA
-
OA
6
+
NA
+
+
Na
+
NA
7
-
NA
-
NA
+
-
NA
8
+
NA
+
+
Na
+
NA
9
NA
+
-
NA
+
-
NA
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