Question

Question 1 of 10 -/1 E View Policies Current Attempt in Progress Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number eg.-15,000 or parentheses eg. (15,000).J Cash - $112 Net Income $0 (a) Purchased $112 of supplies for cash. (b) Recorded an adjustment to record use of $32 of the above supplies. (c) Made sales of $1,456, all on account. (d) Received $896 from customers in payment of their accounts. (e) Purchased equipment for cash, $2,800. (f) Recorded depreciation of building for period used, 5672. eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer

Answer 1

S. NO.	Cash	Net Income	Explanation
(a)	-112	0	As purchased on Cash, hence Cash Will reduce.
(b)	0	32	Here Adjustment is made which may either have +ve or -ve impact on Income Statement, as adjustement is made, ( Non monetary adjsutment)
('c)	0	+1456	Sale is made on Credit, hence No cash will be received or paid off, with this only net income wll be impacted, so impact is taken in net income only.
(d)	+896	0	as cash is received on sale made earlier it will the debtor account and cash account, with this cash will be increased.
('e)	-2800	0	Equipment is purchased on cash, is a capital transaction, hence net income will not be impacted.
(f)	0	-672	Depreciation is a non cash item, hence with this ll not impact the cash itself, hence net income will be impacted as such non cash expenditure shall be passon through income statement only.