Wk 4 - Apply: Summative Assessment: The Mechanics of Accounting Questions and Correct Answers.

Wk 4 - Apply: Summative Assessment:
The Mechanics of Accounting
Questions and Correct Answers.

Burton Company purchased goods for resale. Burton Company paid some cash for the purchase
and the remainder was put on the company's credit accounts with its suppliers.



What is the effect of this transaction on the accounting equation?



Inventory UP, Cash DOWN, Accounts Payable UP

Inventory DOWN, Cash DOWN, Accounts Payable DOWN

Inventory DOWN, Cash UP, Accounts Payable UP

Inventory UP, Cash UP, Accounts Payable DOWN - Answer Inventory UP, Cash DOWN, Accounts
Payable UP



Dridge Company sold inventory for cash. The selling price was more than the original cost of the
inventory.



What is the effect of this transaction on the accounting equation?



Cash UP, Inventory UP, Retained Earnings UP

Cash UP, Inventory DOWN, Retained Earnings DOWN

Cash UP, Inventory DOWN, Retained Earnings UP

Cash UP, Inventory UP, Retained Earnings DOWN - Answer Cash UP, Inventory DOWN, Retained
Earnings UP



Lyman Company paid cash for employee wages.

What is the effect of this transaction on the accounting equation?



Cash UP, Retained Earnings UP

Cash UP, Retained Earnings DOWN