presented below are a number of transactions. determine whether each transaction affects common stock…

presented below are a number of transactions. determine whether each transaction affects common stock, dividends, revenues, expenses, or does not affect stockholders equity. provide titles for the revenues and expenses. select not applicable for account title if it is neither a revenue nor an expense.\ntransaction\naffects\naccount title\na. costs incurred for advertising.\nb. cash received for services performed.\nc. costs incurred for insurance.\nd. amounts paid to employees.\ne. cash distributed to stockholders.\nf. cash received in exchange for allowing the use of the companys building.\ng. costs incurred for utilities used.\nh. cash purchase of equipment.\ni. cash received from investors.

presented below are a number of transactions. determine whether each transaction affects common stock, dividends, revenues, expenses, or does not affect stockholders equity. provide titles for the revenues and expenses. select not applicable for account title if it is neither a revenue nor an expense.\ntransaction\naffects\naccount title\na. costs incurred for advertising.\nb. cash received for services performed.\nc. costs incurred for insurance.\nd. amounts paid to employees.\ne. cash distributed to stockholders.\nf. cash received in exchange for allowing the use of the companys building.\ng. costs incurred for utilities used.\nh. cash purchase of equipment.\ni. cash received from investors.

Answer

Explanation:

Step1: Analyze transaction a

Advertising costs are expenses. They reduce net - income and thus affect stockholders' equity. The account title is Advertising Expense.

Step2: Analyze transaction b

Cash received for services performed is revenue. It increases net - income and stockholders' equity. The account title is Service Revenue.

Step3: Analyze transaction c

Insurance costs are expenses. They reduce net - income and stockholders' equity. The account title is Insurance Expense.

Step4: Analyze transaction d

Amounts paid to employees are expenses. They reduce net - income and stockholders' equity. The account title is Salaries and Wages Expense.

Step5: Analyze transaction e

Cash distributed to stockholders is a dividend. It reduces stockholders' equity. The account title is Dividends.

Step6: Analyze transaction f

Cash received for allowing use of building is revenue. It increases net - income and stockholders' equity. The account title is Rent Revenue.

Step7: Analyze transaction g

Utility costs are expenses. They reduce net - income and stockholders' equity. The account title is Utilities Expense.

Step8: Analyze transaction h

Cash purchase of equipment is an asset - exchange transaction. It does not affect stockholders' equity directly, nor is it revenue or expense. The account title is not applicable for revenue/expense.

Step9: Analyze transaction i

Cash received from investors affects common stock. It increases stockholders' equity. The account title is Common Stock.

Answer:

a. Affects: Expenses, Account Title: Advertising Expense b. Affects: Revenues, Account Title: Service Revenue c. Affects: Expenses, Account Title: Insurance Expense d. Affects: Expenses, Account Title: Salaries and Wages Expense e. Affects: Dividends, Account Title: Dividends f. Affects: Revenues, Account Title: Rent Revenue g. Affects: Expenses, Account Title: Utilities Expense h. Affects: Not applicable, Account Title: Not applicable i. Affects: Common Stock, Account Title: Common Stock