201 FS 12 Transaction Analysis-Income--Key

201 FS 12 Transaction Analysis-Income--Key - 201...

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201 Transaction Analysis—Income Statement 1. Napstone Corp received a $1,500 utility bill in March. The bill will not be paid until April. Napstone records bills as they are received. If Napstone does not make a journal entry at the time the bill is received , how will the basic accounting equation be affected? a. Equities will be overstated; liabilities will be understated b. Equities will be overstated; assets will be overstated c. Liabilities will be overstated; assets will be overstated d. No effect e. None of the above 2. Napstone Corp received a $1,500 utility bill in March. The bill will not be paid until April. Napstone records bills as they are received. If Napstone does not make a journal entry at the time the bill is paid, how will the basic accounting equation be affected? a. Equities will be overstated; liabilities will be understated b. Equities will be overstated; assets will be overstated c. Liabilities will be overstated; assets will be overstated d. No effect e. None of the above
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