How each transaction affects the financial statements

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Applying debit/credit terminology to accounting events

Required

a. In parallel columns, list the accounts that would be debited and credited for each of the following unrelated transactions:
(1) Acquired cash from the issue of common stock.
(2) Provided services on account.
(3) Purchased supplies for cash.
(4) Provided services for cash.
(5) Paid cash for salaries expense.
(6) Paid in advance for two-year lease on office space.
(7) Recorded accrued salaries at the end of the accounting period.
(8) Recognized expense for prepaid rent that had been used up by the end of the accounting period.
(9) Recognized accrued interest revenue.

b. Show how each transaction affects the financial statements by placing a + for increase for decrease, and NA for not affected under each component in a horizontal statements model like the one shown below. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, and FA for financing activity. 

355_264-B-A-D-E-F (88).png

The first event is recorded as an example.

Reference no: EM13915207

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