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Huang Ltd. records their business transactions into the basic accounting equation.

For each of the following independent business activities, indicate the effect on the basic accounting equation.

Signed a contract with a new employee who will start next month at a salary of $1,000 per week.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Purchase $3,000 of equipment on account.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Paid the owners $1,800 dividends in cash.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Collected $540 of accounts receivable from a customer.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Business cards for $75, which were previously purchased on account, were used in September.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

A company received cash of $1,250 from a customer today, on May 8, for services to be performed in June.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Received a hydro electricity bill on September 30 for $920. The bill will be paid in early October.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Provided $2,530 of services, on account, to a customer.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

In March provided $2,450 of services to a customer who paid in advance in February.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

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