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For Each Transaction Identify Its Effect on the Accounting Equation

Question 126

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

Premises:
Received cash in exchange for the issue of common stock
Received cash in exchange for the issue of a note payable
Purchased building and land in exchange for a mortgage note payable
Purchased computer equipment for cash
Purchased computer supplies on account
Provided computer services to customers for cash
Responses:
Debit assets and credit liabilities
Debit one asset and credit another asset
Debit assets and credit retained earnings/revenue
Debit liabilities and credit assets
Debit contributed capital and credit assets
Debit retained earnings and credit assets
Debit assets and credit contributed capital
Not communicated by the formal accounting system

Correct Answer:

Debit assets and credit liabilities
Debit one asset and credit another asset
Debit assets and credit retained earnings/revenue
Debit liabilities and credit assets
Debit contributed capital and credit assets
Debit retained earnings and credit assets
Debit assets and credit contributed capital
Not communicated by the formal accounting system
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