Question

Presented below are a number of transactions. Determine whether each transaction affects common stock, dividends, revenues, expenses, or does not affect stockholders' equity. Provide titles for the revenues and expenses. Select Not applicable for account title if it is neither a revenue nor an expense. Transaction Affects Account Title a. Costs incurred for advertising. b. Cash received for services performed. C. Costs incurred for insurance. d. Amounts paid to employees. e. f. Cash distributed to stockholders. Cash received in exchange for allowing the use of the company's building. g. Costs incurred for utilities used. h. Cash purchase of equipment. i. Cash received from investors.

Answer 1

Transaction		Affects	Account Title
a.	Costs incurred for advertising	Expenses	Advertising expense
b.	Cash received for services performed	Revenues	Service revenue
c.	Costs incurred for insurance	Expenses	Insurance expense
d.	Amounts paid to employees	Expenses	Salary expense
e.	Cash distributed to stockholders	Dividends	Not applicable
f.	Cash received in exchange for allowing the use of the company's building	Revenues	Rent revenue
g.	Costs incurred for utilities used	Expenses	Utilities expense
h.	Cash purchase of equipment	Does not affect stockholders' equity	Not applicable
i.	Cash received from investors	Common stock	Not applicable