Ling Yu Company records their business transactions into the basic accounting equation.

For each of the following independent business activities, indicate the effect on the basic accounting equation.

Signed a contract with a new supplier to purchase $10,000 of inventory next month.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Purchase $250 of business cards on account.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Paid $1,000 cash to the owners as dividends.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Collected $250 of accounts receivable from a customer.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Flyers worth $150, which were previously purchased on account, are used in July.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Received from a customer $935, cash, in August for services to be performed in September.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Received a water utility bill on June 30 for $670. The bill will be paid in early July.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

Provided $3,590 of services, on account, to a customer.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )

In September provided $1,540 of services to a customer who paid in advance in August.

A. Increase assets, decrease assets

B. Increase assets, decrease liabilities

C. Increase assets, increase liabilities

D. Increase assets, increase equity

E. Increase assets, decrease equity

F. Increase liabilities, increase equity

G. Increase liabilities, decrease equity

H. Decrease liabilities, increase equity

I. Decrease liabilities, decrease equity

J. Decrease assets, decrease liabilities

K. Decrease assets, increase liabilities

L. Decrease assets, increase equity

M. Decrease assets, decrease equity

N. No entry is required.

Enter the correct LETTER choice (A B C D E F G H I J K L M N )