BAF 3M 🚨 Ch. 3 Assignment A

Last updated over 1 year ago

14 questions

1

6

2

When business transactions occur, at least three of the individual balance sheet items must change.

True

False

A transaction takes place, leaving a business in a better financial position. Therefore Capital has most likely increased.

True

False

When equipment valued at $4000 is sold for $1000 cash, the items affected are Cash and Equipment. HINT: why would the values be different? What else could be changing?

True

False

The objectivity princple is an accounting standard related to source documents.

True

False

The owner’s withdrawal of cash for personal use reduces Cash and Owner's Equity.

True

False

What is a business transaction?

Drag the transactions to show what effect the following transactions have on the TOTAL assets. Do they increase, decrease, or have no change.

Hint: the change is on the total ASSETS.

Owner invested $85 000 cash in his business.
Purchased a delivery truck for $10 000, paying $2000 cash and the balance to be paid in 90 days.
Borrowed $10 000 from a bank.
Purchased equipment for $2000 cash.
Collected an account receivable, $500 cash.
Sold a building for cash at a price lower than its cost.

Increase
Decrease
No Change

P. Lang’s business owned property that had originally cost $40 000. He sold this property for $75 000. Lang recorded this transaction by increasing Cash by $75 000 and decreasing Property by $75 000. Explain why his analysis is incorrect.

Indicate the effect each of the following transactions has on the total assets, the total liabilities, or the equity, by using the drop-down menu options.

Example: A cash payment is made to Ace Supplies, a creditor.

Total Assets: Decrease
Total Liabilities: Decrease
Owner's Equity: No Change

HINT: There will always be ONE no change in your answers.

3

A new desk for the office is purchased for cash from Equipment Supply Co.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

3

The business performs a service for a customer, J. Rothfels, who pays in full with cash.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

3

The business purchases a new truck from Pine Motors and pays one-third of the cost in cash as a down payment.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

3

Stationery and supplies are purchased from Angeloff’s Stationers but are not paid for at the time of purchase.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

3

The owner, J. Lemaire, takes a sum of money (cash) from the business for his personal use.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

3

Land is sold for cash at a price less than its cost.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

When business transactions occur, at least three of the individual balance sheet items must change.

True

False

A transaction takes place, leaving a business in a better financial position. Therefore Capital has most likely increased.

True

False

When equipment valued at $4000 is sold for $1000 cash, the items affected are Cash and Equipment. HINT: why would the values be different? What else could be changing?

True

False

The objectivity princple is an accounting standard related to source documents.

True

False

The owner’s withdrawal of cash for personal use reduces Cash and Owner's Equity.

True

False

Drag the transactions to show what effect the following transactions have on the TOTAL assets. Do they increase, decrease, or have no change. 

Hint: the change is on the total ASSETS. 

Owner invested $85 000 cash in his business.

Purchased a delivery truck for $10 000, paying $2000 cash and the balance to be paid in 90 days.

Borrowed $10 000 from a bank.

Purchased equipment for $2000 cash.

Collected an account receivable, $500 cash.

Sold a building for cash at a price lower than its cost.

Increase

Decrease

No Change

Indicate the effect each of the following transactions has on the total assets, the total liabilities, or the equity, by using the drop-down menu options.

Example: A cash payment is made to Ace Supplies, a creditor.

Total Assets: Decrease
Total Liabilities: Decrease
Owner's Equity: No Change

HINT: There will always be ONE no change in your answers.

A new desk for the office is purchased for cash from Equipment Supply Co.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

The business performs a service for a customer, J. Rothfels, who pays in full with cash.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

The business purchases a new truck from Pine Motors and pays one-third of the cost in cash as a down payment.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

Stationery and supplies are purchased from Angeloff’s Stationers but are not paid for at the time of purchase.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

The owner, J. Lemaire, takes a sum of money (cash) from the business for his personal use.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

Land is sold for cash at a price less than its cost.

Total Assets:__________
Total Liabilities:__________
Owner's Equity:__________

BAF 3M 🚨 Ch. 3 Assignment A

BAF 3M 🚨 Ch. 3 Assignment A

What is a business transaction?

P. Lang’s business owned property that had originally cost $40 000. He sold this property for $75 000. Lang recorded this transaction by increasing Cash by $75 000 and decreasing Property by $75 000. Explain why his analysis is incorrect.

When business transactions occur, at least three of the individual balance sheet items must change.

A transaction takes place, leaving a business in a better financial position. Therefore Capital has most likely increased.

When equipment valued at $4000 is sold for $1000 cash, the items affected are Cash and Equipment. HINT: why would the values be different? What else could be changing?

The objectivity princple is an accounting standard related to source documents.

The owner’s withdrawal of cash for personal use reduces Cash and Owner's Equity.

What is a business transaction?

Drag the transactions to show what effect the following transactions have on the TOTAL assets. Do they increase, decrease, or have no change. Hint: the change is on the total ASSETS.

P. Lang’s business owned property that had originally cost $40 000. He sold this property for $75 000. Lang recorded this transaction by increasing Cash by $75 000 and decreasing Property by $75 000. Explain why his analysis is incorrect.

Drag the transactions to show what effect the following transactions have on the TOTAL assets. Do they increase, decrease, or have no change.

Hint: the change is on the total ASSETS.