Question

As a manager of a department​ store, you must deal with a variety of business transactions. Place the letter of each of the following transactions next to the effect it has on the accounting equation. a. Paid cash to the stockholders as a distribution of earnings. b. Paid cash to purchase land for building site. c. Paid cash on an account payable. d. Sold stock to stockholders. e. Received cash from the bank in exchange for a note payable.

Answer 1

Answer:

a. Paid cash to the stockholders as a distribution of earnings

cash outflow Assets decrease as cash is an assets which are giving.

also,. equity decrease as we are giving in favor fo the stockholders

b. Paid cash to purchase land for building site

none effect

the land will incrase our asset but, this effect will be negate by the cash used to acquire it

c. Paid cash on an account payable

cash outflow hence, Assets decrease

Then, Liability decrease as the total of our debts is reduced

d. Sold stock to stockholders

Assets increase we solve thus, we receive cash for the stocks

Equity increase as there is moe stock of the company. the equity increased

e. Received cash from the bank in exchange for a note payable.

cash inflow hence, Assets increase

Liabilities increase as we take a new debt. The total amount due for the firm increases.

Explanation: