Question

QUESTION 8 Jackson Inc. purchases land for cash. What effect does this transaction have on the following accounts: o Increase
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Question 8:

CORRECT OPTION

  • Decrease in Cash and Increase in Land

Explaination:

- The journal entry for purchase of land for cash is,

Land a/c Dr. ×××

To Cash a/c ××××

- The entry implies that there is an

  • increase in assets since land is an assets and has been debited
  • Decrease in cash since cash outflow from our hands and has been credited

- Thus, as an affect, there is an decrease in cash and increase of land.

Question 9:

CORRECT OPTION

  • Total assets remains unchanged

Explanation:

- Cash recieved as fee earned, $5000 is a servuce revenue and the entry is an follows.

Cash a/c $5000

To Service revenue $5000

- Since there is an accrual of service revenue of $5000, there will be an increase in Net income by $5000.

- If net income increases then the retained earnings balance also increases.

- If retained earnings balance increases then the total shareholders equity aslo increase.

- On the other hand, if cash received from anyone, there will be increase in cash balance which is a curebt asset for any business. Hence there is an increase in total assets. But here it was given that total assets remains unchnaged.

- So, here from the given options, the odd one out is total assets remains unchanged which is a false statement.

_____×_____

Do Upvote, All the best,

HAPPY CHEGGING.

Add a comment
Know the answer?
Add Answer to:
QUESTION 8 Jackson Inc. purchases land for cash. What effect does this transaction have on the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Indicate the effect of the following transaction on the elements of the accounting equation. Purchased land...

    Indicate the effect of the following transaction on the elements of the accounting equation. Purchased land by signing a nine-month, non-interest-bearing note payable. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease Question 2 3 pts Received $12,000 cash for services provided to a customer. debit accounts receivable; credit fees earned debit cash; credit fees earned debit fees earned; credit cash debit cash; credit supplies expense Account used to record amounts...

  • Can you answer that for me and explain why? 26. A corporation purchases land for $200,000...

    Can you answer that for me and explain why? 26. A corporation purchases land for $200,000 by paying a down payment of $20,000 and by signing a note payable for the remainder of the purchase price. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will increase by $200,000; liabilities will increase by $180,000 and stockholders' equity will increase by $20,000. Assets will increase by $180,000; liabilities will increase by $200,000 and...

  • QUESTION 14 A company purchases supplies on account, what is the effect on the accounting equation?...

    QUESTION 14 A company purchases supplies on account, what is the effect on the accounting equation?    Assets decrease; equity increases Assets decrease; equity decreases Liabilities decrease; equity decreases Liabilities increase; equity increases Liabilities increase; assets increase 4 points    QUESTION 15 Unearned revenues are: Revenues that have been earned and received in cash Revenues that have been earned but not yet collected in cash Liabilities created when a customer pays in advance for products or services before the revenue...

  • Statement of Cash Flows & Select Fees earned Investment Issued note payable Paid dividends Paid interest...

    Statement of Cash Flows & Select Fees earned Investment Issued note payable Paid dividends Paid interest expense Paid salary expense Purchased land Rent expense Select d. Balances Assets + Select ✓ Select Capital Stock Cash Assets Select + ✓ Select Land Notes Payable Assets Liabilities + Stockhc + Select Select ✓ Select Notes Payable Retained Earnings UCI LUL + Select ✓ Select Capital Stock Cash Stockholders' Equity Select ✓ Select Notes Payable Retained Earnings Income Statement Select Fees earned Rent...

  • Assets = Liabilities + Stockholder's Equity Cash + Land Notes Payable Common Stocks Retained Earnings Affected...

    Assets = Liabilities + Stockholder's Equity Cash + Land Notes Payable Common Stocks Retained Earnings Affected Account Balances $ 16,000 + $ 40,000 = $     10,000     + $ 32,000 + $ 14,000 1 $ + = + $ + 2 + = + + 3 + = $ + + 4 + = + + 5 + = + + 6 + = + + Totals + = $ + $ + $ Company transactions during the accounting period: 1....

  • International, Inc. established an allowance for bad debts at the end of October. In November, International...

    International, Inc. established an allowance for bad debts at the end of October. In November, International wrote off a $500 account receivable because payment was considered to be remote. What would be the effect of the $500 account receivable write-off on International's November financial statements? O Assets would decrease, liabilities would remain constant and retained earning would decrease. O Assets would remain constant; liabilities would increase and retained earnings would decrease. O No change would be made in total assets,...

  • can you give me the answer and explain why?also can you explain why C is incorrect....

    can you give me the answer and explain why?also can you explain why C is incorrect. thx 26. | A corporation purchases land for $200,000 by paying a down payment of $20,000 and by signing a note payable for the remainder of the purchase price. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Assets will increase by $200,000; liabilities will increase by $180,000 and stockholders' equity will increase by $20,000. Assets will...

  • The following transaction has been recorded in a particular accounting period. Determine the effect of this...

    The following transaction has been recorded in a particular accounting period. Determine the effect of this transaction on the Accounting Equation Please note: do not overthink the scenario. Instead, deal only with the facts provided. The Accounting Equation effects being requested in any given scenario are for the current period only A business purchases Inventory for $5,000 cash. Increase in Asset Increase in the No Efecto Shareholders Equity Increase in increase in Libis Decrease in Shareholders Equity Increase in As...

  • Multiple Choice Question 56 Skysong, Inc. purchases land for $420000 cash. The clinic assumes $5400 in...

    Multiple Choice Question 56 Skysong, Inc. purchases land for $420000 cash. The clinic assumes $5400 in property taxes due on the land. The title and attorney fees totaled $3200. The clin amount does Skysong, Inc. record as the cost for the land? $436200 O $428600 $427600. O $420000

  • Analyze the effect of each transaction on the accounting equation. For example, if salaries of $500...

    Analyze the effect of each transaction on the accounting equation. For example, if salaries of $500 were paid, the answer would be "Decrease in stockholders' equity (expense) $500 and decrease in assets (cash) $500." a. Performed consulting services for a client in exchange for $3,200 cash. Increase assets (cash) Increase assets (cash) Decrease assets (cash) Decrease stockholders' equity (revenue) $3,200 and increase stockholders' equity (revenue) decrease assets (cash) decrease stockholders' equity (revenue) $3,200. b. Performed consulting services for a client...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT