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How does contingent liability impact earnings?
Contingent liability can impact earnings because it is a projected and future liability. Not knowing what the outcome of the liability is, it can unexpectedly affect a large amount of earnings.
How the increase in expansion affect the demand?
Increase in expansion affect the demand because more supply/expansion with constant demand will lead to excess in expansion which affect the demand.
How does an escrow increase affect my mortgage payment?
An escrow increase can affect your mortgage payment by causing it to go up. This is because an escrow account is used to pay for property taxes and homeowners insurance, and if these costs increase, your monthly payment will also increase to cover the higher expenses.
How do negative numbers impact financial statements in accounting?
Negative numbers in accounting can impact financial statements by representing losses, expenses, or liabilities. They can affect the overall profitability and financial health of a company, as well as influence key financial ratios and performance indicators.
How does an increase in revenue affect working capital?
Revenue affects the capital by decreasing the capital.
How does paying a liability with cash affect the accounting equation?
assets decrease; liabilities decrease
How do debits and credits affect the accounting equation?
The debits in the accounting equation increase the amount that appears on the left side. The credits in the accounting equation do the opposite and increase any amount that appears on the right side.
How does the purchase of equipment by signing a note affect the accounting equation?
asset increased, liability increased
How does receiving a bill to be paid next month for services rendered affect the accounting equation?
assets increase; liabilities increase
When you use cash to pay down account payable how does it affect the accounting equation?
Assets decrese, liability decreases, and Owner's equity has no change. Assets=Liabilities+SE
How does a stock repurchase affect the accounting equation 1 Decrease asset increase equity 2 Increase asset decrease liability 3 Decrease equity increase liability 4 Decrease asset decrease equity?
Decrease asset; since repurchase is with cash, whis is an asset Decrease equity; if repurchased stock is not to be reissued, it is declared void and the number of outstanding assets is decreased. Hence, equity is decreased.
How does vat affect the accounting equation?
The VAT can affect the accounting equation in two different ways. The accounting equation is ASSET=CAPITAL+LIABILITIES So, if VAT is OWED from HMRC (receivable) it will be an asset, so the asset will increase and the Capital will increase as well. ASSET+X=CAPITAL+X+LIABILITIES, where X is the amount of VAT received. If VAT is owed TO HMRC (payable), then the liabilities will increase, which means that the capital will decrease with the same amount. ASSET=(CAPITAL-Y)+(LIABILITIES+Y) where Y is the amount of VAT to be paid.
How does sales affect the accounting equation?
acoounts receivable and capital
Do Debits increase assets and increase liabilities?
Debiting an asset account does increase that account, however debiting a liability account decreases the liability. Remember the double entry accounting equation... Assets = Liabilities + Owners Equity (Stockholders Equity) In double entry accounting as I've stated in many other answers, "for every action there must be an equal and opposite reaction". In other words for ever Debit there must be an equal credit. Since Assets INCREASE with a debit, it stands to reason that Liabilities "MUST" decrease with a Debit. Since opposite sides of the equation can not have the same affect. You can not debit an asset and a liability in the same transaction for the exact amount. For example, say you purchase equipment on credit. Your Assets are going to increase, but so is liabilities, because you now "owe" a debt. Assets increase with a debit, you can't have a second debit for the "same" amount in the single transaction, for every debit there is an equal credit (always). Therefore equipment purchase on credit for $500 will increase your asset of equipment (debit) $500 and increase your liability account payable (credit) $500.
How do withdrawals affect the accounting equation?
Debit Withdraw account and Credit Cash
How does rendering of services for cash affect the accounting equation?
cash assets increase Equity increases as sales revenue increases and net income increases. No effect on Liabilities and Expenses
When the corporation was formed on september 1 2014 common shares were sold to uncle bob for 9200 cash how do these affect the accounting equation and what specifically?
I think you mean accounting equity? The $9,200 would be split in equity between "capital stock" (the par value of the stock) and in "additional paid in capital" (the amount the stock was purchased for less the par value).
