For each of the following items, give an example of a business transaction that has the described effect on the accounting equation:

Increase an asset and increase a liability:

Increase one asset and decrease another asset.

Decrease an asset and decrease owner's equity.

Decrease an asset and decrease a liability.

Increase an asset and increase owner's equity

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For each of the following items, give an example of a business transaction that has the described effect on the accounting equation:

Increase an asset and increase a liability:

Increase one asset and decrease another asset.

Decrease an asset and decrease owner's equity.

Decrease an asset and decrease a liability.

Increase an asset and increase owner's equity

To find an example of a business transaction that has the described effect on the accounting equation, we need to understand the components of the accounting equation. The accounting equation states that assets equal liabilities plus owner's equity.

1. Increase an asset and increase a liability: One example of this type of transaction could be when a business takes out a loan from a bank. This transaction would increase the business's assets (cash received from the loan) and increase its liabilities (the loan amount owed to the bank).

2. Increase one asset and decrease another asset: An example of this type of transaction could be when a company sells a piece of equipment and uses the proceeds to purchase a different piece of equipment. This transaction would increase the cash asset from the sale and decrease the value of one asset (the equipment sold) while simultaneously increasing the value of another asset (the equipment purchased).

3. Decrease an asset and decrease owner's equity: An example of this type of transaction could be when a business pays dividends to its owners/shareholders. Dividends are distributions made to owners/shareholders using the company's assets (often cash). This transaction would decrease the company's assets (cash paid as dividends) and decrease the owner's equity (as the business is distributing profits to owners).

4. Decrease an asset and decrease a liability: A common example of this type of transaction could be when a business makes a payment towards a loan or debt. This transaction would decrease the business's assets (as cash is used to make the payment) and decrease the liabilities (as the outstanding loan or debt is reduced).

5. Increase an asset and increase owner's equity: An example of this type of transaction could be when a business receives cash investment from its owner. This transaction would increase the business's assets (cash received) and increase the owner's equity (as the owner's investment is added to the company's net worth).

Remember, these are just examples, and actual transactions may vary depending on the specific circumstances and nature of the business.

1. Increase an asset and increase a liability:

Example: A business purchases inventory on credit. This transaction increases the asset of inventory and the liability of accounts payable.

2. Increase one asset and decrease another asset:

Example: A business sells a piece of equipment and receives cash. This transaction increases the asset of cash and decreases the asset of equipment.

3. Decrease an asset and decrease owner's equity:

Example: A business pays dividends to its owners. This transaction decreases the asset of cash and decreases the owner's equity.

4. Decrease an asset and decrease a liability:

Example: A business makes a payment on a loan. This transaction decreases the asset of cash and decreases the liability of the loan payable.

5. Increase an asset and increase owner's equity:

Example: A business invests additional funds into the company. This transaction increases the asset of cash and increases the owner's equity.