2.For each transaction numbered 1 through 7 below, identify the effect (a through g) on the accounting equation by placing the letter of the effect in the space provided. You may use each letter more...

Accounting Equation Effects

a.Decrease in revenue and decrease in an asset

b. Increase in revenue and increase in an asset

c.Decrease in expense and increase in an asset

d.Increase in expense and decrease in an asset

e.Increase in revenue and decrease in a liability

f. Increase in expense and increase in a liability

g. Decrease in revenue and increase in a liability

1. Adjusting for the accrual of wages

2. Adjusting for the earning of unearned revenue

3. Adjusting for the accrual of interest revenue

4. Adjusting for the accrual of interest expense

5. Adjusting supplies expense reflecting that part of the supplies expense that was not used

6.Adjusting inventory downward to reflect shrinkage resulting from shoplifting

7. Adjusting prepaid rent for the portion used

Answers

Transactions

1. ________Industrial conveyer belt system acquired for cash

2. ________Cash collected from customers for rental of office space for next year

3. ________One year’s premium on equipment insurance paid in advance

4. ________Property taxes owed to the state but not paid at year end

5. ________ Rent owed to a landlord for the current month