Revenue Expense Net Income Assets Liabilities Equity 1. +4,000 NE +4,000 +4,000 NE +$4,000 11. +5,000 III. NE NE +5,000 NE IV. +5,000 NE V. NE NE NE +5,000 NE +5,000 NE +5,000 -5,000 5,000 NE +1,000 -4,000 +5,000 +4,000 +4,000 NE Match the effect that the transaction below would have on Cathy Company's Income Statement and Balance Sheet. Choose (I), (II), (III), (IV), or (V) from the grid. For example, if the transaction were "Paid $5,000 due on accounts payable," the correct answer would be (III) because there is no effect on revenue, expense, and net income; a $5,000 decrease in assets and liabilities; and no effect on equity. Transaction: The Company received $5,000 cash from customers - $1,000 of the cash received were from customers who were billed in a prior period for services provided to them, while $4,000 of the cash received were from customers paying in advance for cleaning services to be provided in the next period. (Assume that the appropriate adjusting entry was made at the end of the prior period for the $1,000 billing of customers). O III 01 O IV OV Which of the following transactions will have no effect on the quality of income ratio (net cash from operating activities + net income)? O Collecting cash on accounts receivable. Receiving cash for services to be provided in the next period. O Declaring and paying cash dividends. Performing services on account. Customers paid Cathy Company in advance for services to be provided in future periods. Cathy Company's failure to make an adjustment when the services are provided to the customer would cause: an overstatement of revenue and an overstatement of assets. an understatement of revenue and an overstatement of liabilities. an overstatement of revenue and an understatement of liabilities. an understatement of liabilities and an understated of assets. Cathy Company operates a cleaning service. The grid below is a list of possible effects on the Income Statement and the Balance Sheet. The code is: += increase; -- decrease; NE = no effect. Revenue Expense Net Income Assets Liabilities Equity 1. NE +500 -500 NE +500 -500 11. NE +500 -500 -500 NE -500 NE NE NE -500 -500 NE IV. NE +500 -500 -500 -500 NE V. NE NE NE +500 +500 NE Match the effect that the transaction below would have on Cathy Company's Income Statement and Balance Sheet. Choose (I), (II), (III), (IV), or (V) from the grid. For example, if the transaction were "Paid $500 due on accounts payable," the correct answer would be (III) because there is no effect on revenue, expense, and net income; a $500 decrease in assets and liabilities; and no effect on equity. Transaction: The Company used $500 of cleaning supplies. The cleaning supplies were purchased and paid for in a previous period. OIV V