QuestionFebruary 3, 2026

Selected transactions for Verdent Lawn Care Company are as follows. Describe the effect of each transaction on assets liabilities, and stockholders equity. For example, the first answer is: Increase in assets and increase in stockholders' equity. 1. Sold common stock for cash to start business. square 2.Paid monthly rent. square 3. Purchased equipment on account. square 4. Billed customers for services performed. square 5. Paid dividends. square 6. Received cash from customers billed in (4). square 7. Incurred advertising expense on account. square 8. Purchased additional equipment for cash. square 9. Received cash from customers when service was performed. square

Selected transactions for Verdent Lawn Care Company are as follows. Describe the effect of each transaction on assets liabilities, and stockholders equity. For example, the first answer is: Increase in assets and increase in stockholders' equity. 1. Sold common stock for cash to start business. square 2.Paid monthly rent. square 3. Purchased equipment on account. square 4. Billed customers for services performed. square 5. Paid dividends. square 6. Received cash from customers billed in (4). square 7. Incurred advertising expense on account. square 8. Purchased additional equipment for cash. square 9. Received cash from customers when service was performed. square
Selected transactions for Verdent Lawn Care Company are as follows. Describe the effect of each transaction on assets liabilities, and stockholders equity. For example, the first answer is: Increase in assets and increase in stockholders' equity. 1. Sold common stock for cash to start business. square 2.Paid monthly rent. square 3. Purchased equipment on account. square 4. Billed customers for services performed. square 5. Paid dividends. square 6. Received cash from customers billed in (4). square 7. Incurred advertising expense on account. square 8. Purchased additional equipment for cash. square 9. Received cash from customers when service was performed. square

Solution
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Answer

1. Increase in assets and increase in stockholders' equity. ### 2. Decrease in assets and decrease in stockholders' equity. ### 3. Increase in assets and increase in liabilities. ### 4. Increase in assets and increase in stockholders' equity. ### 5. Decrease in assets and decrease in stockholders' equity. ### 6. No effect on assets, liabilities, or stockholders' equity. ### 7. Increase in liabilities and decrease in stockholders' equity. ### 8. No effect on assets, liabilities, or stockholders' equity. ### 9. Increase in assets and increase in stockholders' equity. Explanation 1. Sold common stock for cash to start business Increase in assets and increase in stockholders' equity. 2. Paid monthly rent Decrease in assets and decrease in stockholders' equity. 3. Purchased equipment on account Increase in assets and increase in liabilities. 4. Billed customers for services performed Increase in assets and increase in stockholders' equity. 5. Paid dividends Decrease in assets and decrease in stockholders' equity. 6. Received cash from customers billed in (4) No effect on assets, liabilities, or stockholders' equity (conversion of accounts receivable to cash). 7. Incurred advertising expense on account Increase in liabilities and decrease in stockholders' equity. 8. Purchased additional equipment for cash No effect on assets, liabilities, or stockholders' equity (conversion of cash to equipment). 9. Received cash from customers when service was performed Increase in assets and increase in stockholders' equity.

Explanation

1. Sold common stock for cash to start business<br /> Increase in assets and increase in stockholders' equity.<br /><br />2. Paid monthly rent<br /> Decrease in assets and decrease in stockholders' equity.<br /><br />3. Purchased equipment on account<br /> Increase in assets and increase in liabilities.<br /><br />4. Billed customers for services performed<br /> Increase in assets and increase in stockholders' equity.<br /><br />5. Paid dividends<br /> Decrease in assets and decrease in stockholders' equity.<br /><br />6. Received cash from customers billed in (4)<br /> No effect on assets, liabilities, or stockholders' equity (conversion of accounts receivable to cash).<br /><br />7. Incurred advertising expense on account<br /> Increase in liabilities and decrease in stockholders' equity.<br /><br />8. Purchased additional equipment for cash<br /> No effect on assets, liabilities, or stockholders' equity (conversion of cash to equipment).<br /><br />9. Received cash from customers when service was performed<br /> Increase in assets and increase in stockholders' equity.
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