Question

Following are transactions of ABC., a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount. Purchased office equipment for $1,200 cash. Received cash of $14,000 for services provided to customers during the month. Purchased $300 of office supplies on account. Paid employees $10,000 for their first month's salaries. How many of these transactions decreased ABC's total assets

Answer 1

Answer:

One

Explanation:

According to the given scenario, the total assets are decreasing in the last transaction.

Acquisition of land, equipment, sale of common stock, receiving cash from the buyer and on the other hand acquisition of supplies is not reducing the assets of the company.

Here, the decreasing of total assets is $10,000 and the amount of salary is reducing the cash by $10,000.