Question

A,.Which of the following shows how acquiring cash from the issue of common stock will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	NA	+	+	NA	−	NA	=	NA	NA
B.	+	=	NA	+	+	NA	−	NA	=	NA	+ IA
C.	+	=	NA	+	+	NA	−	NA	=	NA	+ FA
D.	+	=	NA	+	+	+	−	NA	=	+	+ FA

b. Which of the following shows how borrowing cash from creditors will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	+	+	NA	NA	−	NA	=	NA	+ FA
B.	+	=	+	+	NA	NA	−	+	=	−	+ FA
C.	+	=	+	+	NA	NA	−	NA	=	NA	+ IA
D.	+	=	NA	+	+	+	−	NA	=	+	+ FA

c. Which of the following shows how recognizing cash revenue will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	NA	+	+	NA	−	NA	=	NA	NA
B.	+	=	NA	+	+	+	−	NA	=	+	NA
C.	+	=	NA	+	+	+	−	NA	=	+	+ OA
D.	+	=	NA	+	+	+	−	NA	=	+	+ IA

d.Which of the following shows how incurring cash expenses will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	−	=	NA	+	+	NA	−	+	=	−	− OA
B.	−	=	NA	+	−	NA	−	+	=	−	− OA
C.	−	=	NA	+	−	NA	−	+	=	+	− OA
D.	−	=	NA	+	−	NA	−	+	=	−	− FA

e. Which of the following shows how paying a cash dividend will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	−	=	NA	+	+	NA	−	+	=	−	− OA
B.	−	=	NA	+	−	NA	−	+	=	−	− OA
C.	+	=	NA	+	+	NA	−	NA	=	NA	− FA
D.	−	=	NA	+	−	NA	−	NA	=	NA	− FA

f. Which of the following shows how paying cash to reduce long-term liabilities will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	−	+	NA	NA	−	NA	=	NA	− FA
B.	−	=	−	+	NA	NA	−	NA	=	NA	− IA
C.	−	=	−	+	NA	NA	−	+	=	−	− FA
D.	−	=	−	+	NA	NA	−	NA	=	NA	- FA

g. Which of the following shows how paying cash to purchase land will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	NA	=	NA	+	NA	NA	−	NA	=	NA	− IA
B.	NA	=	NA	+	NA	NA	−	NA	=	NA	− FA
C.	NA	=	NA	+	NA	NA	−	+	=	−	− OA
D.	−	=	−	+	NA	NA	−	NA	=	NA	- FA

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Item 9

Item 9 Part 9 of 9 10 points

Watt Company experienced an event that had the following effects on its financial statements.

Balance sheet					Income Statement					Statement of Cash Flows
Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
−		−		NA	NA		NA		NA	− FA

Answer 1

Answers

• Correct Options are Bold, Italics

A,.Which of the following shows how acquiring cash from the issue of common stock will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	NA	+	+	NA	−	NA	=	NA	NA
B.	+	=	NA	+	+	NA	−	NA	=	NA	+ IA
C.	+ [increases Cash]	=	NA	+	+ [increases common stock]	NA	−	NA	=	NA	+ FA [is a financing activity]
D.	+	=	NA	+	+	+	−	NA	=	+	+ FA

• b. Which of the following shows how borrowing cash from creditors will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+ [Cash increases]	=	+ [Accounts payable increases]	+	NA	NA	−	NA	=	NA	+ FA
B.	+	=	+	+	NA	NA	−	+	=	−	+ FA
C.	+	=	+	+	NA	NA	−	NA	=	NA	+ IA
D.	+	=	NA	+	+	+	−	NA	=	+	+ FA

• c. Which of the following shows how recognizing cash revenue will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	NA	+	+	NA	−	NA	=	NA	NA
B.	+	=	NA	+	+	+	−	NA	=	+	NA
C.	+ [Cash increases]	=	NA	+	+ [Retained earnings increases]	+ [Revenue increases]	−	NA	=	+	+ OA
D.	+	=	NA	+	+	+	−	NA	=	+	+ IA

• d.Which of the following shows how incurring cash expenses will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	−	=	NA	+	+	NA	−	+	=	−	− OA
B.	− [Cash decreases]	=	NA	+	[RE decreases]	NA	−	+ [Expense increases]	=	[Net Income decreases]	− OA
C.	−	=	NA	+	−	NA	−	+	=	+	− OA
D.	−	=	NA	+	−	NA	−	+	=	−	− FA

• e. Which of the following shows how paying a cash dividend will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	−	=	NA	+	+	NA	−	+	=	−	− OA
B.	−	=	NA	+	−	NA	−	+	=	−	− OA
C.	+	=	NA	+	+	NA	−	NA	=	NA	− FA
D.	− [Cash decreases]	=	NA	+	[RE decreases]	NA	−	NA	=	NA	− FA

• f. Which of the following shows how paying cash to reduce long-term liabilities will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	+	=	−	+	NA	NA	−	NA	=	NA	− FA
B.	−	=	−	+	NA	NA	−	NA	=	NA	− IA
C.	− [Cash decreases]	=	[Liability decreases]	+	NA	NA	−	+	=	−	− FA
D.	−	=	−	+	NA	NA	−	NA	=	NA	- FA

• g. Which of the following shows how paying cash to purchase land will affect a company’s financial statements?

Balance sheet						Income Statement					Statement of Cash Flows
	Assets	=	Liabilities	+	Equity	Rev.	−	Exp.	=	Net Inc.
A.	NA [Cash decreases, Land increases]	=	NA	+	NA	NA	−	NA	=	NA	− IA [its an investing activity]
B.	NA	=	NA	+	NA	NA	−	NA	=	NA	− FA
C.	NA	=	NA	+	NA	NA	−	+	=	−	− OA
D.	−	=	−	+	NA	NA	−	NA	=	NA	- FA