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Match the Combination of Changes in the Accounting Equation Described

Question 108

Matching

Match the combination of changes in the accounting equation described below with the events listed below.

Premises:
Paid dividend to owners
Customer pays bill in cash
Major client goes out of business
Purchased a truck by paying cash
Owner made contribution to firm
Paid note that came due
Creditor takes stock in the company in exchange for retiring debt
Borrowed cash
Responses:
Liabilities decrease; Owners' equity increases
Assets increase; Assets decrease
Not recorded in accounting system
Liabilities increase; Liabilities decrease
Assets increase; Owner's equity increase
Assets increase; Liabilities increase
Assets decrease; Owner's equity decrease
Liabilities increase; Owners' equity decreases
Assets decrease; Liabilities decrease
Owners' equity increases; Owners' equity decreases

Correct Answer:

Liabilities decrease; Owners' equity increases
Assets increase; Assets decrease
Not recorded in accounting system
Liabilities increase; Liabilities decrease
Assets increase; Owner's equity increase
Assets increase; Liabilities increase
Assets decrease; Owner's equity decrease
Liabilities increase; Owners' equity decreases
Assets decrease; Liabilities decrease
Owners' equity increases; Owners' equity decreases
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