Question

Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity (Katie Wyer, Capital) increases by $18,000. Element Direction Item 1. Received cash from owner as additional investment, $18,000. Asset Owner's Equity Increases Increases Cash Katie Wyer, Capital 2. Paid advertising expense, $4,850. Liability Increases Katie Wyer, Capital 3. Purchased supplies on account, $2,100. Liability Decreases Accounts Receivable 4. Billed customers for delivery services on account, $14,700. Liability Increases Accounts Payable Liability Decreases Delivery Service Fees 5. Received cash from customers on account, $8,200. Asset Increases Cash Asset Increases Accounts Receivable

Answer 1

Transaction	Transaction	Accounting equation element	Direction	Account
1	Received cash from owner as additional investment $18,000	Asset and Equity	Cash increases Equity increases	Cash and Wyer capital
2	Paid advertising expenses $4,850	Asset and equity	Cash decreases Equity decreases	Cash and equity
3	Purchase supplies on account $2,100	Asset and Liability	Asset increases Liability increases	Supplies and Accounts payable
4	Billed customers for delivery services on account $14,700	Asset and Equity	Asset increases Equity increases	Accounts receivable and equity
5	Received cash from customers on account $8,200	Asset and Asset	Cash increases and accounts receivable decreases	Cash and accounts receivable

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