Are the following events recorded in the accounting records? Explain your answer in each case. (a) The owner of the company dies. (b) Supplies are purchased on account. (c) An employee is fired. (d) The owner of the business withdraws cash from the business for personal use. g

(a) The owner of the company dies.

This event is not recorded in the accounting records. If the company is a sole-proprietorship, the death of the owner simply causes the end of the firm. If the firm is a corporation, it can continue to operate even if the owner dies, ownership can be transferred.

(b) Supplies are purchased on account.

This event is recorded. Supplies are an asset, and are debited, and because they are purchased on account, the associated liability account is credited.

(c) An employee is fired.

This event is not recorded. Consequences of the firing may be recorded, for example, an indemnization that reduces cash.

(d) The owner of the business withdraws cash from the business for personal use.

This event is recorded. The cash account is debited (decreased), and the personal expenses, or non-operating expenses account is increased.