How would element of accounting equation be affected by sale

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1. What is a primary control for determining the accuracy of a business's record keeping?

2. Fathom Consulting Services acquired land three years ago for $25,000. Fathom recently signed an agreement to sell the land for $80,000. In accordance with the sales agreement, the buyer transferred $80,000 to Fathom's bank account on October 6. How would elements of the accounting equation be affected by the sale?

3. (a) How does the payment of dividends of $30,000 affect the three elements of the accounting equation? (b) Is net income affected by the payment of dividends? Explain.

4. Assume that Donahue Consulting erroneously recorded the payment of $11,500 of dividends as salary expense.

(a) How would this error affect the equality of the accounting equation? (b) How would this error affect the income statement, retained earnings statement, balance sheet, and statement of cash flows?

Reference no: EM13899868

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