Write a minimum 120-word response to each of the following scenarios from Exercise E3-1 in Financial Accounting (p. 132) describing the effect of each transaction on assets, liabilities, and stockholder’s equity:
- Selected transactions for Thyme Advertising Company, Inc.
- Issued common stock to investors in exchange for cash received from investors.
- Paid monthly rent.
- Received cash from customers when service was performed.
- Billed customers for services performed.
- Paid dividend to stockholders.
- Incurred advertising expense on account.
- Received cash from customers billed in (4).
- Purchased additional equipment for cash.
- Purchased equipment on account.
Use the Excel® spreadsheet to record your answers and submitwith your responses.
Consider the following as you read:
In the 1400’s, Luca Pacioli, who is known as the father of accounting, introduced the world to a better understanding of accounting and the double entry accounting system through his book, Summa de Arithmetica, Geometria, Proportioni et Proportionalita. Today, the same principles and concepts keep many companies around the world well informed of their financial standing:
- How are business events captured for reporting?
- What is the ultimate purpose of communicating accounting information?
