II. PROBLEM 2. Effects of Transactions Transactions may be classified based on their effects on the basic accounting model. These are: 1. Increase in Assets = Increase in Owner's Equity 2. Increase in Assets = Increase in Liabilities 3. Increase in one Asset = Decrease in another Asset 4. Decrease in Asset = Decrease in Owner's Equity 5. Decrease in Asset = Decrease in Liabilties 6. Increase in Liabilities = Decrease in Owner's Equity 7. Increase in one Liability = Decrease in another Liability 8. Increase in Owner's Equity = Decrease in Liability 9. Increase in one Owner's Equity = Decrease in another Owner's Equity Required: Classify the following events according to their effects on the accounting equation by indicating one of the numbers above. a. Invested Php140,000 cash and Php8,000 worth of supplies into the business b. Received Php84,000 for services rendered c. Purchased equipment on account, Php74,000 d. Paid Php15,000 for supplies e. Paid salaries, Php42,000 f. Acquired land for Php350,000 g. Paid Php40,000 on account from the letter c transaction h. Issued a promissory note for the balance of the letter c transaction i. Paid utilities, Php4,000 j. Paid Php6,000 for supplies and Php14,000 for equipment k. Received Php94,000 for services rendered 1. Withdrew Php40,000 cash for personal use m. Inventory of supplies showed Php6,000 of supplies on hand

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Chapter1: Financial Statements And Business Decisions
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I.
PROBLEM 2. Effects of Transactions
Transactions may be classified based on their effects on the basic
accounting model. These are:
1. Increase in Assets = Increase in Owner's Equity
2. Increase in Assets = Increase in Liabilities
3. Increase in one Asset = Decrease in another Asset
4. Decrease in Asset = Decrease in Owner's Equity
5. Decrease in Asset = Decrease in Liabilties
6. Increase in Liabilities = Decrease in Owner's Equity
7. Increase in one Liability = Decrease in another Liability
8. Increase in Owner's Equity = Decrease in Liability
9. Increase in one Owner's Equity = Decrease in another Owner's
Equity
Required: Classify the following events according to their effects on the
accounting equation by indicating one of the numbers above.
a. Invested Php140,000 cash and Php8,000 worth of supplies into
the business
b. Received Php84,000 for services rendered
c. Purchased equipment on account, Php74,000
d. Paid Php15,000 for supplies
e. Paid salaries, Php42,000
f. Acquired land for Php350,000
g. Paid Php40,000 on account from the letter c transaction
h. Issued a promissory note for the balance of the letter c
transaction
i. Paid utilities, Php4,000
j. Paid Php6,000 for supplies and Php14,000 for equipment
k. Received Php94,000 for services rendered
1. Withdrew Php40,000 cash for personal use
m. Inventory of supplies showed Php6,000 of supplies on hand
||
Transcribed Image Text:I. PROBLEM 2. Effects of Transactions Transactions may be classified based on their effects on the basic accounting model. These are: 1. Increase in Assets = Increase in Owner's Equity 2. Increase in Assets = Increase in Liabilities 3. Increase in one Asset = Decrease in another Asset 4. Decrease in Asset = Decrease in Owner's Equity 5. Decrease in Asset = Decrease in Liabilties 6. Increase in Liabilities = Decrease in Owner's Equity 7. Increase in one Liability = Decrease in another Liability 8. Increase in Owner's Equity = Decrease in Liability 9. Increase in one Owner's Equity = Decrease in another Owner's Equity Required: Classify the following events according to their effects on the accounting equation by indicating one of the numbers above. a. Invested Php140,000 cash and Php8,000 worth of supplies into the business b. Received Php84,000 for services rendered c. Purchased equipment on account, Php74,000 d. Paid Php15,000 for supplies e. Paid salaries, Php42,000 f. Acquired land for Php350,000 g. Paid Php40,000 on account from the letter c transaction h. Issued a promissory note for the balance of the letter c transaction i. Paid utilities, Php4,000 j. Paid Php6,000 for supplies and Php14,000 for equipment k. Received Php94,000 for services rendered 1. Withdrew Php40,000 cash for personal use m. Inventory of supplies showed Php6,000 of supplies on hand ||
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