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The Impact of Line Item Changes on Financial Statements

Which of the following items (a thru d) is the effect on financial statements of a recording a $100 purchase of raw materials?

assests = liab + Equity Rev - Exp = Net inc. Cash Flow
a) (100) NA (100) NA - 100 (100) NA
b) 100 NA 100 NA - 100 (100) (100)
c) NA NA NA NA NA NA (100)
d) NA NA NA NA - 100 (100) NA

Solution Preview

Please find attached a formatted MS Excel spreadsheet containing the answer to the question below. I have also included step by step examples of how the resulting answer was obtained. Feel free to contact me again in the event that additional assistance is required in the future.

Which of the following items (a thru d) is the effect on financial statements of a recording a $100 purchase of raw materials?
Balance Income Statement of
Sheet Statement Cash Flows
Assets = Liabilities + Equity Revenue - Expense = Net Income Cash Flow

a) (100) = NA + (100) NA - 100 = (100) NA
b) 100 = NA + 100 NA - 100 ...

Solution Summary

This file contains a formatted MS Excel spreadsheet, which contains examples of the impact that a line item change can have on a company's financial statements.

$2.19