Indicate the effect of each of the following transactions on any or all of the three financial statements of a business:
1. Statement of financial position
2. Statement of financial performance
3. Statement of cash flows
Apart from indicating the financial statements (s) involved, use appropriate phrases such as ‘increase total asset', ‘decrease equity', ‘increase income', ‘decrease cash flow' to describe the transaction concerned.
- Purchase equipment for cash.
- Provide services to a client, with payment to be received within 40 days.
- Pay a liability.
- Invest additional cash into the business by the owner.
- Collect an account receivable in cash.
- Pay wages to employees.
- Receive the electricity bill in the mail, to be paid within 30 days.
- Sell a piece of equipment for cash.
- Withdraw cash by the owner for private use.
- Borrow money on a long-term basis from a bank.