Class Exercises 1 hero.docx - Ans Starter S1-2 A As the...

This preview shows page 1 - 2 out of 3 pages.

Ans Starter S1-2. A- As the banker is not part of the organization, so he is an external user and can view only accounting information. B- The best financial statement that can provide best information to answer the banker’s questions is the balance sheet as it will show the ability of the organization to handle future commitments. Answer Ex 1- 7 A) Received $50000 cash from owner: Cash Increase and owner equity. B) Paid the current month’s office rent of $4,000 : Cash Decrease $4000 and Account Payable increase. C) Paid $3500 cash to purchase office supplies : Cash Decrease $3500 and Office supplies increase. D) Performed engineering services for a client on account, $6,000. Account Receivable increase and Service Revenue increase. E) Purchased office furniture on account at a cost of $5,000. Office Supplies Increase and account payable increase. F) Received cash on account, $3,000. Cash Increase and owner Capital. G) Paid cash on account, $2,500. Cash Decrease $2500 and Account payable increase.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture