What's More Activity 2.1: Transaction Analysis Directions: Analyze the following transactions and identify its effects on assets, liabilities, and capital. Write I for increase, D for decrease, NE for No effect and /D if the effect is only in one of major accounts. Transactions Assets Liabilities Capital 1. The owner invested cash to start the business. 2. Borrowed money on bank and issued a promissory note. 3. Paid the advertisement of the business. 4. The business purchase office supplies on account. 5. The owner withdrawn cash on the business. 6. Receive cash for rendering service to the client. 7. Purchase an equipment for cash. 8. Paid the electric and water bill. 9. Rendering service to a client on account. 10. Collected half of the payment from client in No. 9.

A decrease in Accounts Payable is a ( SOURCE or  USE) of funds?

Question 3

Assets that can be easily converted into money without loss of value are Select one: O A. liquid. O B. liabilities. O C. transactions balances. OD. currencies.

4. There is a difference in return on Total Assets and the return on Total Equity. a. What is the difference between the two? b. Which ratio of the two is normally higher?

3.  Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Declared and paid a cash dividend.     Sold short-term trading securities at a gain.     Retired fully depreciated equipment.     Sold a machine at a loss.     Purchased long-term available-for-sale securities.     Decreased accounts receivable.     Purchased 90-day Treasury bill.     Incurred a net loss.     Declared and issued a stock dividend.     Sold treasury stock.

best answer?

Which of the following is incorrect? A. Capital + Liabilities = Assets B. Assets Liabilities Capital Capital + Liabilities = Capital - Liabilities C. Assets D. Assets -

2. Why are investments shown as a current asset?

The form I need help with is attached