Below are listed several transactions that a business may enter into.
1. Provide services to customers on account
2. Purchase land by paying cash
3. Purchase a fire insurance policy that will provide coverage for a two-year period
4. Acquire cash by issuing common stock
5. Recognize expense for amount of office supplies that had been used during the period
6. Receive payment from a customer for services that will be provided over the next six months
Required:
a) In the table below, indicate the accounts that would be debited and credited for each of the preceding transactions. b) Show how each transaction affects the financial statements by placing a + for increase, - for decrease, and NA for not affected under each component in the horizontal financial statements model shown below. In the Cash Flow column, use the letters OA for operating activities, IA for investing activities, and FA for financing activities.

Question

Below are listed several transactions that a business may enter into.
1. Provide services to customers on account
2. Purchase land by paying cash
3. Purchase a fire insurance policy that will provide coverage for a two-year period
4. Acquire cash by issuing common stock
5. Recognize expense for amount of office supplies that had been used during the period
6. Receive payment from a customer for services that will be provided over the next six months
Required:
a) In the table below, indicate the accounts that would be debited and credited for each of the preceding transactions.  b) Show how each transaction affects the financial statements by placing a + for increase, - for decrease, and NA for not affected under each component in the horizontal financial statements model shown below. In the Cash Flow column, use the letters OA for operating activities, IA for investing activities, and FA for financing activities.

Quizplus · Accepted Answer

The Answer of Below are listed several transactions that a business may enter into.
1. Provide services to customers on account
2. Purchase land by paying cash
3. Purchase a fire insurance policy that will provide coverage for a two-year period
4. Acquire cash by issuing common stock
5. Recognize expense for amount of office supplies that had been used during the period
6. Receive payment from a customer for services that will be provided over the next six months
Required:
a) In the table below, indicate the accounts that would be debited and credited for each of the preceding transactions.  b) Show how each transaction affects the financial statements by placing a + for increase, - for decrease, and NA for not affected under each component in the horizontal financial statements model shown below. In the Cash Flow column, use the letters OA for operating activities, IA for investing activities, and FA for financing activities.

Below Are Listed Several Transactions That a Business May Enter