Question

1.Determine the increases and decreases in the five accounting types.

Purchased inventory of $3,500 on account.

Assets increase, liabilities increase.

Assets decrease, liabilities increase.

Assets decrease, equity decreases, expenses increase.

Liabilities decrease, equity increases, revenues increase.

2.Determine the increases and decreases in the five accounting types.

Sold inventory costing $800, for $1,500 cash.

Assets increase, liabilities increase.

Assets increase, liabilities increase, revenues increase.

Assets decrease, equity decreases, expenses increase.

Assets increase, equity increases, revenues increase, expenses increase.

3.

Determine the increases and decreases in the five accounting types.

Recorded depreciation of $3,000 for the period.

Assets increase, equity increases, expenses increase.

Assets decrease, liabilities decerease.

Assets decrease equity decreases, expenses decrease.

Assets decrease, equity decreases, expenses increase.

Determine the increases and decreases in the five accounting types.

Paid for the inventory in Question 1.

Assets increase, liabilities increase.

Assets decrease, liabilities decrease.

Assets decrease, equity decreases, expenses increase.

Liabilities decrease, equity increases, revenues increase.

Answer 1

Question:1

The Answer is Assets increase, liabilities increase.

1) Inventory[Asset] increases with purchase and it is purchased on account [Liability] also increases.

Question:2

The Answer is Assets increase, equity increases, revenues increase, expenses increase.

1) Goods sold for cash[Asset Increases], differs between cost and revenue is profit[ Equity increases], sales increases revenue and cost of goods sold increases expenses.

Question:3

The Answer is Assets decrease, equity decreases, expenses increase.

1) Depreciation is adjusted to assets[ Asset Decreases], depreciation is expense [Expense Increases] and increase in expense decreases equity.

Question:4

The Answer is Assets decrease, liabilities decrease.

1) Cash paid for inventory [Asset Decreases] and it is paid to set off liability [Liability Decreases]