Increase an asset and increase a liability
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For each of the following items, give an example of a business transaction that has the described effect on the accounting equation:
Increase an asset and increase a liability.
Borrowing money & signing a note payable
Increase one asset and decrease another asset.
Buying inventory for cash
Decrease an asset and decrease owner's equity.
Payment of a cash dividend
Decrease an asset and decrease a liability.
settlement of a note payable
Increase an asset and increase owner's equity.
Issuing stock for cash
Note: Can you give us examples and tell little more about each? It may help us in the discussion board a lot more. Thank You.
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Solution Summary
Give an example of a business transaction that has the described effect on the accounting equation:
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Increase an asset and increase a liability.
Borrowing money & signing a note payable
If we borrow money from a bank, then cash would increase, and the notes payable account (a liability account) would also increase
Increase one asset and decrease another asset. ...
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- BA, Ain Shams University, Cairo Egypt
- MBA, California State University, Sacramento
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