For each of the following transactions, indicate the type by entering AS for asset source transactions, AU for asset use transactions, AE for asset exchange transactions, and CE for claims exchange transactions.1) ____Paid $2,000 in dividends to its stockholders.2) ____Recorded the accrual of $1,000 in salaries to be paid later.3) ____Issued common stock for $20,000 in cash.4) ____Earned revenue to be collected next year.5) ____Paid the salaries accrued in #2 above.6) ____Received cash from customers in #4 above.7) ____Purchased supplies on account.8) ____Received $500 from a customer for services to be provided later.

Question

What will be an ideal response?

Answer 1

1) AU 2) CE 3) AS 4) AS 5) AU 6) AE 7) AS 8) AS

1) Assets (cash) decreased, Equity (retained earnings from dividends) decreased
2) Liabilities (salaries payable) increased, Equity (retained earnings from salaries expense) decreased
3) Assets (cash) increased, Equity (common stock) increased
4) Assets (accounts receivable), Equity (retained earnings from revenue) increased
5) Assets (cash) decreased, Liabilities (salaries payable) decreased
6) Assets (cash) increased, Assets (accounts receivable) decreased
7) Assets (supplies) increased, Liabilities (accounts payable) increased
8) Assets (cash) increased, Liabilities (unearned revenue) increased