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Give an example for each of the following types of transactions: 1. Increase in one asset, decrease in another asset 2 Inerease in asset, increase in liability. 3.Inerease in asset, increase in owner's capital 4 Decrease in asset, decrease in liability 5. Decrease in asset, decrease in owner's capital. 6 Decrease in liabilities, increase in owner's capital. 7 Increase in one liability, decrease in another liability 8. Increase in liabilities, decrease in owner's capital |
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Answer» Solution :1. Purohase of furniture for cash-INCREASE in furniture and DECREASE in cash. 2. Parchase of furniture on credit-Increase in furniture and increase in liability. 3. Capital INTRODUCED by proprietor-Increase in cash and increase in capital. 4. Payment to creditors-Decrease in cash and decrease in creditors. 5. Cash withdrawn by proprietor-Decrease in cash and decrease in capital. 6. Conversion of partner's loan into capital-Increase in capital and decrease in loan 7 Bills Payable accepted-Increase in bills payable and decrease in creditors. 8. OUTSTANDING expenses provided-Increase in creditors for outstanding expenses and decrease in capital. |
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