WHEN RECORDING A TRANSACTION IN ACCOUNTING FOR A PURCHASE FOR A "VEHICLE" FOR A COMPANY, LIKE A COMPANY TRUCK, IF THE ASSET IS RECORDED AS AN EXPENSE, WHAT DOES THIS DO TO THE BASIC ACCOUNTINGEQUATION AND WHAT DOES IT DO TO INCOME.?
A. The framework used to record and summarize the economic activities of a business enterprise is referred to as the accountingequation. State the basic accountingequation and define each of its major components. How are business transactions and financial statements related to the accountingequation?
B. Explain t
Valmont, Inc., experienced the following events in 2012, in its first year of operations.
1. Received $20,000 cash from the issue of common stock.
2. Performed services on account for $50,000.
3. Paid the utility expense of $12,500.
4. Collected $39,000 of the accounts receivable.
5. Recorded $9,000 of accrued sal
1 - What is the accountingequation? What does it tell you? Why does it have to balance? What happens if the equation does not balance?
2 - What are debits and credits? How do debits and credits affect the accountingequation? Are debits always increases? Are credits always decreases? Why or why not?
The fundamental accountingequation can be applied to your personal finances. For each of the following transactions, show how the accountingequation would be kept in balance.
Paid for semester's tuition (decrease assets: cash account; decrease owners' equity: expense account increases).
1. Took out a school lo
A. What are the elements of the accounting environment? How do they affect the financial statements? Why are these elements important? How do they affect comparability between companies?
B. What is the accountingequation? What does it tell you? Why does it have to balance? What happens if the equation does not balance?
6) Cash is collected from a customer who was previously put on account. How does the collection of the cash affect the accountingequation?__A, B, C, or D__
A) assets increase; owner's equity increases
B) assets increase; liabilities increase
C) assets increase; assets decrease
D) assets decrease; owner's equity decreases
For each of the following items, give an example of a business transaction that has the described effect on the accountingequation:
1. Increase an asset and increase a liability.
2. Increase one asset and decrease another asset.
3. Decrease an asset and decrease owner's equity.
4. Decrease an asset and decrease a liab