The bookkeeping process - Analyzing transactions

3 important questions on The bookkeeping process - Analyzing transactions

A hotel buys $900 worth of food provisions for its storeroom and uses an open account. The periodic inventory is system.

Food purchase (Expense) increase
Accut payable (liability) increase

Ken is starting a new business (proprietorship). Ken invests cash of $55,000, plus land and building with a basis, respectively, of $40,000 and $175,000.

Cash (Asset) increase
Land (Asset) increase
Building (Assets) increase
Capital (Equity) increase

Stephens is starting a new incorporation business and invests $50,000 for 4,000 shares of no-par common stock.

Cash (Asset) increase
Common stock (Equity) increase

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