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On September 30 MFP Co paid employee salaries of $7,000 including $1000 it owed to its employees last month What are the effects of this transaction on the accounting equation

On September 30, MFP Co. paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation?

a.

Expenses increased, liabilities increased, and assets increased.

b.

Assets decreased, liabilities decreased, and expenses increased.

c.

Assets decreased, expenses decreased, and liabilities increased.

d.

Expenses decreased, liabilities decreased, and assets decreased.

e.

Assets increased, expenses increased, and liabilities decreased.

 

 

76. Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January:

1. Issued 10,000 shares of common stock for $15,000 cash.

2. Purchased land for $12,000, signing a note payable for the full amount.

3. Purchased office equipment for $1,200 cash.

4. Received cash of $14,000 for services provided to customers during the month.

5. Purchased $300 of office supplies on account.

6. Paid employees $10,000 for their first month’s salaries.

What was the total amount of Gotebo’s liabilities following these six transactions?

a. $12,300.

b. $27,300.

c. $22,600.

d. $15,500.

 

 

77. Consider the following transactions:

Issued common stock for cash.

Purchased equipment by signing a note payable.

Paid rent for the current month.

Collected cash from customers on account.

How many of these four transactions increased the given company’s total assets?

a. One.

b. Two.

c. Three.

d. Four.

 

 

78. Assume that Sallisaw Sideboards, Inc. had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April.

Issued common stock for cash, $5,000.

Provided services to customers on account, $2,000.

Provided services to customers in exchange for cash, $900.

Purchased equipment and paid cash, $4,300.

Paid April rent, $800.

Paid employee salaries for April, $700.

What was Sallisaw’s retained earnings balance at the end of April?

a. $11,400.

b. $12,100.

c. $16,400.

d. Some other amount.

 

 

79. Consider the following transactions:

Issued common stock for cash.

Purchased equipment by signing a note payable.

Provided services to customers on account.

Collected cash from customers on account.

How many of these four transactions increased the given company’s total liabilities?

a. One.

b. Two.

c. Three.

d. Four.

 

 

 

80. Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January:

1. Issued 10,000 shares of common stock for $15,000 cash.

2. Purchased land for $12,000, signing a note payable for the full amount.

3. Purchased office equipment for $1,200 cash.

4. Received cash of $14,000 for services provided to customers during the month.

5. Purchased $300 of office supplies on account.

6. Paid employees $10,000 for their first month’s salaries.

How many of these transactions decreased Gotebo’s total assets?

a. One.

b. Two.

c. Three.

d. Four.

 

 

81. Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January:

1. Issued 10,000 shares of common stock for $15,000 cash.

2. Purchased land for $12,000, signing a note payable for the full amount.

3. Purchased office equipment for $1,200 cash.

4. Received cash of $14,000 for services provided to customers during the month.

5. Purchased $300 of office supplies on account.

6. Paid employees $10,000 for their first month’s salaries.

How many of these transactions increased Gotebo’s liabilities? 

a. Four.

b. Three.

c. Two.

d. One.

 

 

82. Which of the following transactions causes a decrease in stockholders’ equity?

a. Pay dividends to stockholders.

b. Obtain cash by borrowing from a local bank. 

c. Provide services to customers on account.

d. Purchase office equipment for cash.

 

 

 

83. How many of the following events would require an expense to be recorded?

Ordering office supplies

Hiring a receptionist

Paying employee salaries for the current month

Receiving but not paying a current utility bill

Paying for insurance in advance

a. One.

b. Two.

c. Three.

d. Four.

 

 

84. Which of the following is NOT possible for a business transaction?

a. Increase assets and decrease revenue.

b. Decrease assets and increase expense.

c. Increase liabilities and increase expense.

d. Decrease liabilities and increase revenue.

Jan 27 2020 View more View Less

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