Solved

Match Each Transaction to Effect of the Accounting Equation You

Question 100

Matching

Match each transaction to effect of the accounting equation You may use each choice more than once or not at all.

Premises:
Issued debt to finance the purchase of property
Issued common stock to finance the purchase of property
Used cash resulting from retained earnings to finance the purchase of property
Declared cash dividends to shareholders
Paid the previously declared dividends
Skipped dividends on cumulative preferred stock
Declared and distributed a 10% stock dividend
Declared a 3:1 stock split
The market value of common stock doubled during the year
Responses:
– A and – L
+ A and + SE (Contributed Capital)
+ A and + SE (Retained Earnings)
+ A and – A
+ A and + L
– A and – SE (Contributed Capital)
– A and – SE (Retained Earnings)
+ L and –SE (Retained Earnings)
– L and + SE (Retained Earnings)
+ SE (Contributed Capital) and – SE (Retained Earnings)
No journal entry or effect

Correct Answer:

– A and – L
+ A and + SE (Contributed Capital)
+ A and + SE (Retained Earnings)
+ A and – A
+ A and + L
– A and – SE (Contributed Capital)
– A and – SE (Retained Earnings)
+ L and –SE (Retained Earnings)
– L and + SE (Retained Earnings)
+ SE (Contributed Capital) and – SE (Retained Earnings)
No journal entry or effect
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