Transactions (1) Purchased £1,000 of supplies on credit. (2) Purchased £15,000 equipment for £10,000 cash and £5,000 note. (3) Received £25,000 cash for consulting service to be performed next month. (4) At 31 December, the company paid £12,000 cash for December's rent. (5) Received £14,000 cash for £4,000 consulting service and £10,000 rental
Transactions (1) Purchased £1,000 of supplies on credit. (2) Purchased £15,000 equipment for £10,000 cash and £5,000 note. (3) Received £25,000 cash for consulting service to be performed next month. (4) At 31 December, the company paid £12,000 cash for December's rent. (5) Received £14,000 cash for £4,000 consulting service and £10,000 rental
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Acc112
Transcribed Image Text:QUESTION 1
Please indicate the effect/impact of each transaction on the relevant accounts. Please follow the example shown.
EXAMPLE:
(1) Owner invested £20,000 cash in the business
ANSWER:
(1)
Cash increased by £20,000.
Owner capital increased by £20,000.
Transactions
(1) Purchased £1,000 of supplies on credit.
(2) Purchased £15,000 equipment for £10,000 cash and £5,000 note.
(3) Received £25,000 cash for consulting service to be performed next month.
(4) At 31 December, the company paid £12,000 cash for December's rent.
(5) Received £14,000 cash for £4,000 consulting service and £10,000 rental.
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Step 1 Purchased £1000 of supplies on credit
VIEWStep 2 Purchased £15,000 equipment for £10,000 cash and £5,000 note.
VIEWStep 3 Received £25,000 cash for consulting service to be performed next month:
VIEWStep 4 At 31 December, the company paid £12,000 cash for December's rent.
VIEWStep 5 Received £14,000 cash for £4,000 consulting service and £10,000 rental:
VIEW
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