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Accounting equation

Please complete the attached practice sheet.
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For each situation below, indicate its effects on the accounting elements shown on the accompanying chart. Use the following letters to indicate your answer (you do not need to enter amounts):

Increase = I Decrease = D No effect = N

1. Derek Co. acquired cash from the owners to begin business operations.

Assets Liabilities Equity Revenues Expenses Net Income Cash

2. Ergo Co. provided services to its customers for cash.

Assets Liabilities Equity Revenues Expenses Net Income Cash

3. Freight Co. borrowed cash from the Local Bank.

Assets Liabilities Equity Revenues Expenses Net Income Cash

4. Galaxy Co. incurred operating expenses and paid cash.

Assets Liabilities Equity Revenues Expenses Net Income Cash.

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For each situation below, indicate its effects on the accounting elements shown on the accompanying chart. Use the following letters to indicate your answer (you do not need to enter amounts):

Increase = I Decrease = D No effect = N

1. Derek Co. acquired ...

Solution Summary

Response explains the concept of accounting equation through an example.

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