Question

solve this all exercise 25

E1-25 Using the accounting equation to analyze transactions As the manager of a Papa Sean's restaurant, you must deal with a variety of business transactions. Give an example of a transaction that has each of the following effects on the accounting equation: a. Increase one asset and decrease another asset. b. Decrease an asset and decrease equity. c. Decrease an asset and decrease a liability. d. Increase an asset and increase equity. e. Increase an asset and increase a liability,

Answer 1

decrease a Increase increase in one asset and decrease another asset 1 Cash collected from Debtors Cash 2 insurance prepaid Prepaid insurance decrease aseet and decrease equity 1 Redemption of common stock Accounts receivable cash 1b cash common stock cash retained earnings 2 dividend paid C decrease an asset and decrease a liability 1 cash paid to creditors cash accounts payable cash wages payable 2 payment of wages payable ld increase in one asset and increase equity 1 issuance of common stock cash common stock 2 issuance of preferred stock cash preferred stock ld increase as asset and increase liabilty 1 Issuance of bond cash bond payable cash note payable 2 Issuance of note