Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAA transaction recorded as a debit to Accounts Payable and a credit to Cash.AssetsLiabilitiesStk. EquityRevenuesExpensesNetStmt. of IncomeCash Flows???????
What will be an ideal response?
(D) (D) (NA) (NA) (NA) (NA) (D)
Paying cash to reduce liabilities decreases both assets and liabilities. Because credits decrease assets, the decrease in assets (Cash) is recorded with a credit, and because debits decrease liabilities, the decrease in liabilities (Accounts Payable) is recorded with a debit. There is no effect on the income statement. There is a cash outflow for operating activities on the statement of cash flows.
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Scott has a bachelor's degree in ethics and human resources, and he has extensive experience working with employees and managers regarding ethics, especially in the area of ethical dilemmas. In his current position he has assisted extensively in determining if the company's decisions are both ethical and lawful. Which position in the company does Scott's background make him ideally suited for?
A. board of directors position B. values specialist C. ethical dilemma watchdog D. decision tree manager E. ethics officer
The statement of cash flows:
A) along with the balance sheet and income statement is prepared on the accrual basis. B) along with the balance sheet and statement of retained earnings is dated as of a specific date. C) along with the balance sheet is used to analyze liquidity. D) ties the balance sheet to the statement of retained earnings.
The person who claims the privilege is the one who can revoke the privilege
Indicate whether the statement is true or false
Glen Company uses the perpetual inventory system. The company entered into the following events:1) Purchased merchandise inventory that cost $10,000 under terms of 2/10, n/30.2) Made payment to the supplier within the discount period.3) Sold all of the goods to customers on account for $22,000.What is Glen's cost of goods sold as a result of these three transactions?
A. $9,800 B. $10,000 C. $21,800 D. $9,000