Question

Based on the following transactions, identify the effect on the accounting equation using arrows, (Up) for an increase and (Down) for a decrease. If a transaction impacts two items in the same category (for example two assets), then put both arrows in the same box. If there is no change to an account, leave it blank. Transaction Asset Liab Com Stock Rev Exp Div Paid rent in advance for the office space a company uses Hired employees that start in 2 weeks Performed services that we were already paid for last month Recorded depreciation on a building Recorded the adjusting entry for prepaid rent Recorded an adjusting entry for services performed that were never recorded Paid employee's wages we owed them Bought a car, paid cash for down payment and took out a loan for the remainder

Answer 1

Accounting equation

	Assets	Liab	Common Stock	revenue	expense	Div
Paid rent in advance for the office space a company uses	Up Down
Hired employees that start in 2 weeks
Performed services that we were already paid for last month		Down	Up	UP
Recorded depreciation on a building	Down		Down		UP
Recorded the adjusting entry for prepaid rent	Down		Down		Up
recorded an adjusting entry for services performed that were never recorded	Up		Up	Up
Paid employee wages we owed them	Down	Down
Bought a car paid cash for down payment and took out a loan for the remainder	Up Down	UP