Reference no: EM132974449

Problem 1: Transaction Analysis - Based on the accounting equation, for each transaction below indicate

(i) which balance sheet accounts of the company are adjusted and
(ii) whether each account involved increases or decreases as a result of the transaction.

a. A company sells (and delivers) goods to a customer for cash (ignore the effect on cost of goods sold).
b. A company records cost of goods sold.
c. A company pays employee wages in cash for work the employees have just completed.
d. A company sells (and delivers) goods to a customer on account (i.e., a credit sale) (ignore the effect on cost of goods sold).
e. A company receives cash from their customers for sales the company previously made to the customers on account.
f. A company pays the bank cash for interest on the company's loan from the bank (assume the interest was not previously accrued/recorded).
g. By the end of the year, some of the company's prepaid insurance has expired.