Question

Q.8 Give necessary transactions for the following effect of increase and decrease in Assets,
Capital and Liabilities.​

Answer 1

Answer:

This increases the cash account (Asset) by $120,000, and increases the capital stock (Equity) account. Thus, the asset and equity sides of the transaction are equal.

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Sample Accounting Equation Transactions.

Transaction Type Assets Liabilities + Equity

Sell stock Cash increases Equity increases