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 dollar 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 = NAOn April 1, Year 1, Wetzel Co. paid a supplier, Jacobs Company, the amount owed on account related to a purchase of inventory on account with terms of 2/10, net/30. The inventory was purchased on March 1, Year 1.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
(D) (D) (NA) (NA) (NA) (NA) (D)
Since payment was not made within the 10-day discount period, no discount is available. The payment on account decreases assets (cash) and decreases liabilities (accounts payable) by the amount of the invoice. It is reported as a cash outflow for operating activities.
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