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Business
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IDENTIFY THE EFFECTS OF THE TRANSACTIONS BELOW ON THE ACCOUNTING EQUATION. USE THE GUIDE ABOVE. Cash investment by the owner Receipt of a statement of account for the month’s rent Purchase of supplies on account Purchase of equipment for cash Rendering service for cash Payment of an account Rendering service on

IDENTIFY THE EFFECTS OF THE TRANSACTIONS BELOW ON THE ACCOUNTING EQUATION. USE THE GUIDE ABOVE. Cash investment by the owner Receipt of a statement of account for the month’s rent Purchase of supplies on account Purchase of equipment for cash Rendering service for cash Payment of an account Rendering service on

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TOPIC SUMMARY

ACCOUNTING TRANSACTIONS CAN BE CATEGORIZED INTO 9 TYPES OF TRANSACTIONS AS FOLLOW:

  1. INCREASE IN ASSET, INCREASE IN LIABILITY
  2. INCREASE IN ASSET, INCREASE IN EQUITY
  3. DECREASE IN ASSET, DECREASE IN LIABILITY
  4. DECREASE IN ASSET, DECREASE IN EQUITY
  5. INCREASE IN LIABILITY, DECREASE IN EQUITY
  6. DECREASE IN LIABILITY, INCREASE IN EQUITY
  7. INCREASE IN ONE ASSET, DECREASE IN ANOTHER ASSET
  8. INCREASE IN ONE LIABILITY, DECREASE IN ANOTHER LIABILITY
  9. INCREASE IN ONE EQUITY ACCOUNT, DECREASE IN ANOTHER EQUITY ACCOUNT

WHERE:

  • INCREASE IN INCOME WILL INCREASE EQUITY
  • INCREASE IN EXPENSE WILL DECREASE EQUITY

 

IDENTIFY THE EFFECTS OF THE TRANSACTIONS BELOW ON THE ACCOUNTING EQUATION. USE THE GUIDE ABOVE.

  1. Cash investment by the owner
  2. Receipt of a statement of account for the month’s rent
  3. Purchase of supplies on account
  4. Purchase of equipment for cash
  5. Rendering service for cash
  6. Payment of an account
  7. Rendering service on account
  8. Collection of an account
  9. Payment of salary
  10. Cash withdrawal by the owner
  11. Receipt of electric bill for the month
  12. Purchase of merchandise inventory on account
  13. Receipt and at the same time, payment of water bill for the month
  14. Additional cash investment by the owner
  15. Purchase of prepaid insurance
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