0
What is the effect on total assets of the purchase of land for cash?
Wiki User
∙ 13y ago
An increase in Land and a decrease in cash, total effect is zero.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What will a purchase of an asset for cash do?
A purchase of an asset for cash will increase total assets(casH) and increase total owner's equity (capital).
The cash flow on total assets ratio is defined as cash flows from operations divided by average total assets?
True
Where would the purchase on noncurrent assets be reported in the statement of cash flows?
Purchase of fixed asset is shown under cash flows from investing activities as an outflow of cash because purchase of assets is an investing activity and it causes reduction of cash flow.
What the difference between current assets vs total assets?
Current assets are assets include assets that will converted into cash or consumed in the current operating period while total assets include all assets regardless of when they will be converted to cash or consumed.
How does paying divedends effect assets?
It reduces cash in the bank.
What is purchase of assets?
Asset A/c Dr To Bank/Cash Ac
Is paying cash for a dividend an increase or a decrease to your assets?
stock dividends what impact on total assets
What is the natural logarithm of total assets?
cash/sales ratio
When en expense is paid in cash net what is the effect on net assets and profit?
net assets decrease and profit decreases
What is the journal entry to purchase asset from general reserve?
General reserves need to be converted into cash first by issuing new shares to share holders and after that cash can be used to purchase assets.
Cash flows from financing?
cash flow from financing means all those transactions related to cash inflow or out flow of share capital in business or purchase of assets.
What is the effect of a purchase of inventory on account on the current ratio and on working capital respectivelyAssume a current ratio greater than one prior to this transaction?
Purchase of inventory can either be on cash or credit. In the first case, while the value of your inventory would increase, your bank balance would decrease, leading to no change in the current assets and, therefore, no change in the current ratio as well. If goods are bought on credit, while your current assets will increase, so will your current liabilities (as you now owe creditors more), leading to no change in the current ratio, again. Due to the same reasons, whether the purchase was on cash or credit, the working capital also remains the same. If bought on cash, the value of inventory increase while cash decreases, leading to no change in the total current assets and, thus, no change in working capital. If goods are bought on credit, current assets increase and also current liabilities, leading to no change in the working capital, again.
