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For Each of the Following Transactions, Identify the Effects as Reflected

Question 226

Essay

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example. a.
 L. Chester inv ested $100,000 in a  corporation +A +  E  \begin{array}{llcc} \text { L. Chester inv ested \( \$ 100,000 \) in a } &\\ \text { corporation } &\underline{\quad+\mathrm{ A} \quad}& \text { \underline{\quad + \text { E } \quad}} \end{array}

b.
 Land was purchased for $50,000 A down payment of $15,000 cash  was made and a note was signed  for the balance. \begin{array}{llcc} \text { Land was purchased for \( \$ 50,000 \). } &\\ \text { A down payment of \( \$ 15,000 \) cash } &\\ \text { was made and a note was signed } &\\ \text { for the balance. } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}

c.
Services were rendered to  customers for cash \begin{array}{llcc} \text {Services were rendered to } &\\ \text { customers for cash } &\quad\quad\quad\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\end{array}

d.
 A building was purchased for  cash.\begin{array}{llcc} \text { A building was purchased for } &\\ \text { cash.} &\quad\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}

e. Supplies were purchased for cash. \begin{array}{llcc} \text {Supplies were purchased for cash. } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}

f.  Paid the office secretary’s salary. \begin{array}{llcc} \text { Paid the office secretary's salary. } & \underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}

g.
 The amount owed on the land from Part (b) was paid \begin{array}{llcc} \text { The amount owed on the land } &\\ \text {from Part (b) was paid } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}

Correct Answer:

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a. +A +E
b. +A +L
c....

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