You are watching: The purchase of an asset on credit
1. Leaves total assets unchanged Reason: Becuase, In one next Asset will decrease together asset sold, but on the various other side accounts receivable will boost , for this reason net impact will be zero. Entry will certainly be accounts Receivable Dr heritage (asset which sold) 2. To…View the full answer
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Transcribed picture text: D1 The revenue of an asset on credit transaction for what it price increases assets and liabilities. Reduce assets and liabilities. Leaves total assets unchanged. Reduce assets and increases liabilities. D 2. When collection is make on account Receivable, total assets will continue to be the same. Stockholders equity will increase. D 3. A revenue generally increases assets and also liabilities. Boosts assets and stockholders' equity. Increases assets and decreases stockholders' equity. Leaves full assets unchanged. D 4. A paid dividend decreases assets and stockholders' equity. 4. A paid dividend reduce assets and also stockholders' equity. Rises assets and also stockholders' equity. Increases assets and decreases stockholders' equity. Decreases assets and also increases stockholders' equity. 5. Peceiving payment of a section of an accounts receivable Receiving payment of a part of an account receivable will certainly not affect total assets. Increase liabilities. Rise stockholders' equity. Decrease net income. 6. An price decreases assets and also liabilities. To reduce stockholders' equity. Pipeline stockholders' same unchanged. Is usually the exact same as a liability. D7 i beg your pardon of the adhering to items has actually no effect on maintained earnings? price Dividends Land purchase Revenue D 8. If a agency buys a $700 machine on credit, this transaction will affect income statement and also retained income statement only. Revenue statement only. Revenue statement, retained income statement, and balance s balance sheet only. A payment the a section of an account payable will not affect total assets. Rise liabilities. Not affect stockholders' equity. Decrease network income. 10. Powers Corporation got a cash advancement of $500 indigenous a practice assets raised by $500. Equity increased by $500. Liabilities lessened by $500. Both assets and also equity enhanced by $500. D 11 Courtney firm purchased devices for $1,800 cash. As a an outcome equity diminished by $1,800. Assets enhanced by $1,800. Total assets continued to be unchanged. Both assets and equity decreased by $1,800. 12. Comstock Company detailed consulting services and also billed the assets continued to be unchanged. Assets enhanced by $2,500. Equity increased by $2,500 Both assets and also equity boosted by $2,500. D 13 Budke Corporation paid dividends the $5,000. Together a result of this event, the dividends account was enhanced by $5,000. Dividend account was reduced by $5,000. Cash account was increased by $5,000. Cash was increased and the dividends account was diminished by 14. If a agency pays dividends of $10,000, stockholders' equity will certainly be reduced by $10,000. Net income will be decreased by $10,000. Retained earnings will be reduced by $10,000. Both preserved earnings and also stockholders' equity will be reduced b- 34:21 15 If a agency issues typical stock for $40,000 and uses $30,000 of the cash to purchase a truck, assets will be enhanced by $10,000. Equity will be decreased by $40,000. Assets will certainly be increased by $40,000. Assets will certainly be unchanged. 16. Are progressed receipts from client treated together revenue at the moment of receipt? Why or why not? Yes, they space treated as revenue at the moment of receipt since the firm has accessibility to the cash. No, the lot of revenue cannot be adequately determined until the firm completes the work. Yes, The intent of the agency is to perform the work and also the client is confident that the solutions will be finish No, revenue can not be known until the job-related is performed. D 17. The receipt of cash in advance from a customer rises assets and also stockholders' equity. Boosts assets and decreases stockholders' equity. Boosts assets and also liabilities. Nobody of these answer choices are correct.