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For Each Transaction Identify the Effect on the Accounting Equation

Question 128

Matching

For each transaction identify the effect on the accounting equation, You may use each choice more than once or not at all.

Premises:

Responses:

Adjusting for the accrual of wages

Decrease in revenue and decrease in an asset

Adjusting for the earning of unearned revenue

Increase in revenue and increase in an asset

Adjusting for the accrual of interest revenue

Decrease in expense and increase in an asset

Adjusting for the accrual of interest expense

Increase in expense and decrease in an asset

Adjusting supplies expense reflecting that part of the supplies expense that was not used

Increase in revenue and decrease in a liability

Adjusting inventory downward to reflect shrinkage resulting from shoplifting

Increase in expense and increase in a liability

Adjusting prepaid rent for the portion used

Decrease in revenue and increase in a liability

Premises:

Adjusting for the accrual of wages

Adjusting for the earning of unearned revenue

Adjusting for the accrual of interest revenue

Adjusting for the accrual of interest expense

Adjusting supplies expense reflecting that part of the supplies expense that was not used

Adjusting inventory downward to reflect shrinkage resulting from shoplifting

Adjusting prepaid rent for the portion used

Responses:

Decrease in revenue and decrease in an asset

Increase in revenue and increase in an asset

Decrease in expense and increase in an asset

Increase in expense and decrease in an asset

Increase in revenue and decrease in a liability

Increase in expense and increase in a liability

Decrease in revenue and increase in a liability

Correct Answer:

Premises:

Responses:

Adjusting for the accrual of wages

Adjusting for the earning of unearned revenue

Adjusting for the accrual of interest revenue

Adjusting for the accrual of interest expense

Adjusting supplies expense reflecting that part of the supplies expense that was not used

Adjusting inventory downward to reflect shrinkage resulting from shoplifting

Adjusting prepaid rent for the portion used

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