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201 FS 9 Transaction Analysis-Balance Sheet--Key

201 FS 9 Transaction Analysis-Balance Sheet--Key - 201...

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201 Transaction Analysis—Balance Sheet 1. A company paid $40,000 for inventory. How will this transaction affect the fundamental accounting equation? a. No effect b. Increase assets, increase equities c. Debit cash; credit inventory d. Debit inventory; credit cash e. None of the above 2. A company issued 50,000 shares of $5 common stock for $300,000. How will this transaction affect the fundamental accounting equation? 3. A company purchased $30,000 of inventory on account. If the company failed to record this transaction, how is the fundamental accounting equation affected at the time the money is received? 4. A company paid $80,000 to rent an office. The rental contract begins in two months. If the company failed to record this transaction, how will the basic accounting equation be affected on the date the rent is paid?
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