Question

Presented below are three transactions. Mark each transaction as affecting owner's investment (I), owner's drawings (D), revenue (R), expense (E), or not affecting owner's equity (NOE). ________(a) Received cash for services performed ________(b) Paid cash to purchase equipment ________(c) Paid employee salaries

Answer 1

a. revenue (R), affecting owner's investment (I)

b. not affecting owner's equity (NOE)

c. expense (E) and affecting owner's investment (I)

Step-by-step explanation:

Revenues and Expense form Profits which are included in the statement of changes in equity through the Retained Income line item, thus these two also affect owners investment.