Question

EF1-26 (book/static) Question Help Indicate the effects of the following business transactions on the accounting equation of Vivian's Online Video store. Use the following accounts: Cash Accounts Receivable Supplies, Office Furniture, Accounts Payable, Common Stock Dividends, Rental Revenue, and Rent Expense. Transaction (a) is answered as a guide. (Click the icon to view the transactions.) a. Received cash of $10,000 from issuance of common stock. (Transaction (a) is answered as a guide) a. Increase of (Cash) Increase equity (Common Stock) b. Earned video rental revenue on account. 52,800 b. Choose from any drop-down list and then click Check Answer Clear All Check Answer parts 6 remaining

Answer 1

Effect Accounts Effect Accounts a. Increase assets Cash Increase equity Common stock b. Increase assets Accounts Receivable Increase equity Rental Revenue C. Increase assets Office Furniture Increase liability Accounts Payable d. Increase assets Cash Decrease assets Accounts Receivable e. Decrease assets Cash Decrease liability Accounts Payable f. Increase assets Cash Increase equity Rental Revenue g. Decrease assets Cash Decrease equity Rent expense h. Decrease assets Cash Increase assets Supplies

Note: Revenue and Expenses are transferred to profit and loss account where we get Net income and then that Net income ultimately becomes part of equity therefore in case of Rental Revenue and Rent expense it will affect equity.

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