Business Administration 2257 Lecture Notes - Lecture 1: Retained Earnings, Accounts Receivable, Accounting Equation

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Jessica Bond

Document Summary

Explain your answer in each case: the company wins an award as one of the top 50 companies in canada to work for. No no accounting transaction has occurred: supplies are purchased on account. Yes increase in assets (supplies) and decrease in cash: a shareholder dies. Yes change in share capital: the company pays a cash dividend to its shareholders. Yes decrease in s(cid:28667)(cid:28660)r(cid:28664)(cid:28667)ol(cid:28663)(cid:28664)rs" (cid:28664)qu(cid:28668)ty: a local lawyer agrees to provide legal services to the company for the next year. No, because for one account to increase, there must be a correspondent increase/decrease in a different account: natalie believes debit balances are favourable and credit balances are unfavourable. For example, if a third party paid the company the amount owing for the services provided, then cash increases and accounts receivable decreases. Cash account now has a debit balance while accounts receivable has a credit balance, yet the total asset amount has not changed.