Accounting Assistance?

Question

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.
Increase one asset and decrease another asset.
Decrease an asset and decrease owner's equity.
Decrease an asset and decrease a liability.
Increase an asset and increase owner's equity.

Answer 1

1) Buying a fixed asset(machine) on credit.
2) Buying a fixed asset(machine) for cash
3) Company buys back its own shares.
4)Sell a fixed asset(machine) that you still owed money on.
5) Issue stock for cash.

Answer 2

Q. Increase an asset and increase a liability.
A. Purchase a fixed asset item on credit. You'd
Dr Fixed assets (increase asset)
Cr A/cs payable (increase liab)

Q. Increase one asset and decrease another asset.
A. Purchase a fixed asset item for cash. You'd
Dr Fixed assets (increase asset)
Cr Cash (decrease asset)

Q. Decrease an asset and decrease owner's equity.
A. Reverse any prepaid expense, say rent, to expenses. You'd
Dr Rent Expense (which wld go to decrease owner's equity eventually)
Cr Prepaid rent (decrease asset)

Q. Decrease an asset and decrease a liability.
A. Pay off any creditor. You'd
Dr A/cs payable (decrease liab)
Cr Cash (decrease asset)

Q. Increase an asset and increase owner's equity.
A. Owner pumps in more cash into the business. You'd
Dr Cash (increase asset)
Cr Owner's equity (increase owner's equity)

Answer 3

funds, short term investments, receivables(in common terms those due w/i a three hundred and sixty 5 days) inventories preaid fees. all contemporary sources NP AP undemanding inventory and retained earnings on the backside