Exercise 1A

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Exercise 1A

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Answers:

Exercise 1A Answers

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Transaction A:
Since cash is received cash goes up, and since capital stock is an Owner's Equity account, it goes up along with cash.

Transaction B:
Any time cash is received assets always goes up, services performed is how revenues are gained, therefore revenues increase owner's equity.

Transaction C:
Supplies are an asset, so assets will increase and since it was paid for by cash, it will decrease the cash also.

Transaction D:
Utilities are paid for by cash therefore assets (cash) will decrease, and expenses will also decrease owner's equity.

Transaction E:
Cash borrowed will increase assets (cash) and increase obligation (liabilities).