Olive Enterprises experienced the following events during 2012.

1. Acquired cash from the issue of common stock.

2. Paid cash to reduce the principal on a bank note.

3. Sold land for cash at an amount equal to its cost.

4. Provided services to clients for cash.

5. Paid utilities expenses with cash.

6. Paid a cash dividend to the stockholders.

Explain how each of the events would affect the accounting equation by writing the letter I for increase, the letter D for decrease, and NA for does not affect under each of the components of the accounting equation.

Question

Business

Katelyn Short

14 April, 21:28

Olive Enterprises experienced the following events during 2012.

1. Acquired cash from the issue of common stock.

2. Paid cash to reduce the principal on a bank note.

3. Sold land for cash at an amount equal to its cost.

4. Provided services to clients for cash.

5. Paid utilities expenses with cash.

6. Paid a cash dividend to the stockholders.

Explain how each of the events would affect the accounting equation by writing the letter I for increase, the letter D for decrease, and NA for does not affect under each of the components of the accounting equation.

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Answers (1)

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Sam Glover · Answer 1

1. Cash - Assets (I) & Common Stock - Liabilities (I)

2. Cash - Assets (D) & Bank Note - Liabilities (D)

3. Land - Assets (D) & Cash - Assets (I)

4. Services revenue - Revenue (I) & Cash - Assets (I)

5. Cash - Assets (D) & Utilities expense-Expenses (I)

6. Cash - Assets (D) & Retained utilities-Owner's Equity (D)