julijewl
Jan 24, 2012, 07:01 PM
How would a transaction of paid research and development expenses for the current year effect three element of accounting equation
pready
Jan 25, 2012, 07:45 AM
you paid cash, which means an asset (Cash) decreases and the cash was paid for an expense, which means that there is an increase in expenses.
Owners Equity = Net Income, so Revenues increase net income and expenses decrease owners equity, so your expenses for R&D will decrease Owners Equity.