As a result of this transaction, the effect on the accounting equation is an increase in assets, an increase in liabilities a decrease in assets, a decrease in owners equity a decrease in assets, a decrease in liabilities a decrease in assets, an increase in liabilities 3. CAM Company will initially classify this payment as an operating expense an intangible asset a prepaid asset a prepaid expense 4. XYZ Company, which uses the periodic inventory method, has the following record for a particular inventory item. RAM Company keeps its records on a calendar-year basis and makes adjusting entries only at the close of each year. The rent is a one-year lease ending September 30, Year 2.
Net income is divided by net sales.
Net sales is divided by net assets. The cost of goods sold is added to operating expenses, and the sum is divided by net sales. The cost of goods sold is subtracted from net sales, and the difference is divided by net sales. Checks are mailed to the stockholders. The company incurs a liability.