Identify how each of the following separate transactions affects financial state
ID: 2372888 • Letter: I
Question
Identify how each of the following separate transactions affects financial statements. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from financing activities, and cash flows from investing activities. For increases, select "+" in the column or columns. For decreases, select "%u2013" in the column or columns. If both an increase and a decrease occur, place a "+/-" in the column or columns. The first transaction is completed as an example. (Leave no cells blank - be certain to select "0" wherever required.)
Identify how each of the following separate transactions affects financial statements. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from financing activities, and cash flows from investing activities. For increases, select "+" in the column or columns. For decreases, select "%u2013" in the column or columns. If both an increase and a decrease occur, place a "+/-" in the column or columns. The first transaction is completed as an example. (Leave no cells blank - be certain to select "0" wherever required.)
Explanation / Answer
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value due to business transactions. Generally speaking, the source account for the transaction is credited (an entry is made on the right side of the account's ledger) and the destination account is debited (an entry is made on the left). Each transaction's debit entries must equal its credit entries.[1][2] The difference between the total debits and total credits in a single account is the account's balance. If debits exceed credits, the account has a debit balance; if credits exceed debits, the account has a credit balance.[3] For the company as a whole, the totals of debit balances and credit balances must be equal as shown in the trial balance report, otherwise an error has occurred. Accountants use the trial balance to prepare financial statements (such as the balance sheet and income statement) which communicate information about the company's financial activities in a generally accepted standardized format.