With respect to the additions to Property and Equipment for 2021, discuss the TWO relevant assertions (existence, completeness, valuation, rights & obligations, cut-off, or presentation & disclosure) for this account.

Given your selected assertions, indicate an audit test for each assertion.

Assume that a customer purchases groceries and cleaning supplies with a total price of $500. The inventoried cost for the groceries and cleaning products is 72% of the sales price. How does this transaction effect the accounting equation? Consider both the sale and the reduction in inventory. The customer paid cash.

Question 14 options:

1)	Current Assets increase by $140 and Equity increases by $140.
2)	Sales increase by $500, Cost of Sales increases by $360 and Equity increases by $140. There is no change in current assets.
3)	Cash increases by $500, liabilities decrease by $360, Sales increases by $500 and cost of sales increases by $360.
4)	Cash increases by $500 and inventory decreases by $360 and net sales increases by $140.