Final Answer:
(a) The effect on the accounting equation for Bombeck Inc. during August of the current year is an increase in assets and equity. (b) Debit-Credit Analysis: Debit Cash, Debit Accounts Receivable, Credit Sales Revenue, Debit Supplies Expense, and Debit Retained Earnings.
Step-by-step explanation:
During August, Bombeck Inc. engaged in various transactions impacting the accounting equation. Let's break down the effects on assets, liabilities, and equity. When the company makes sales, it receives cash or accounts receivable. These transactions increase assets: Debit Cash or Accounts Receivable. On the other side of the equation, to recognize the revenue generated from sales, Bombeck Inc. credits Sales Revenue, impacting equity positively.
However, conducting business also incurs expenses. For instance, if the company purchased supplies, it would debit Supplies Expense, decreasing equity. Lastly, if Bombeck Inc. incurs any losses or dividends, it would debit Retained Earnings, affecting equity negatively.
In summary, the transactions impact the accounting equation by increasing assets and equity through sales, while expenses decrease equity. The debit-credit analysis aligns with the fundamental accounting principles, where assets and expenses are increased through debits, and revenue and equity are increased through credits. This ensures the accounting equation (Assets = Liabilities + Equity) remains balanced.
Complete Question Here:
Bombeck Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis