Optional exercises—SolutionsExercise 1Presented here are five economic events. For each item, indicate whether the event increased(+), decreased (–), or had no effect (NE) on assets, liabilities, and stockholders’ equity.
1.Received cash for services rendered.
2.Purchased supplies on account.
3.Paid employees' salaries.
4.Dividends paid in cash.
5.Expenses paid in cash.
Exercise 2For each of the following accounts indicate the effect of a debit or a credit on the account andthe normal balance. Increase (+), Decrease (–).AnswerDebit _Credit_Normal Balance1.Salaries and Wages Expense.__+_ _ ___–______Dr___2.Accounts Receivable__+_______–______Dr___3.Service Revenue.__–_______+______Cr___4.Dividends__+_______–______Dr___5.Retained Earnings__–_______+______Cr___