Purchase Solution

Transaction effects on income statement, balance sheet and cash flow statement

Not what you're looking for?

Ask Custom Question

The following three scenarios describe various practices that a company management team undertook to increase or decrease reported net income, the amount reported as assets and liabilities, or reported cash flow for the accounting period.

Discuss the effects on the income statement, balance sheet, and cash flow statement for each of the following situations:

Scenario 1: On July 16, the business owner took home, for personal use, office supplies that cost the company $478.
Scenario 2: The company accepted a note from the chief executive officer and loaned him $50,000. But the note has no due date, and will only be repaid if the CEO is fired.
Scenario 3: On December 15, a clerk ordered $15,000 of inventory to be delivered at the end of the year. The clerk asked the supplier to delay billing until the first of next year.
Your answers should contain factual information for each situation.

Purchase this Solution

Solution Summary

The expert examines transaction effects on income statement, balance sheets and cash flow.

Solution Preview

ANSWERS
Please see attached file for answers.

Scenario Net income Balance sheet Cash Flow
1 No effect Asset (office supplies) decreases by ...

Purchase this Solution


Free BrainMass Quizzes
Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.