7.The five major categories of information in an accounting system are assets, liabilities, equities, revenues, and expenses. Below are listed several business events. Indicate which category (or categories) of information will be INCREASED by each event.
Information category (or categories) that will increase
a.An auto dealership sold three
cars, costing a total of $60,000,
for $90,000.
b.Mark Evers, the owner of Evers Company,
rented a video projector to show his
employees three training films. At
the time of renting, he paid the fee.
c.Fox Drugstore borrowed $6,000
from the local bank.
d.Martin Supply paid $8,000 to its
landlord for the current month's
rent.
e.Sage Corporation sold $200,000 in
stock to investors.
8.For each of the transactions that follow, identify the accounts in the accounting system that would be affected by the transaction and indicate whether the account balance would increase or decrease:
Transaction
Account Increase or
Decrease?
a.Three partners invested $50,000 in their partnership.
b.A carpet cleaning business cleaned the carpeting in an office building for $1,000 cash.
c.Office supplies costing $300 were used during the month.
d.Owners withdrew cash totaling $15,000.
e.A grocery sold inventory costing $25,000, for $35,000.
f.Meyerson Company paid off a $800 note it owed to a supplier.