What is the equation budget for each of the following 1- The first transaction means that Safia (the owner) entered a capital of $ 10,000 in cash to start the business. An asset (cash) column is created to record this transaction. The effect of the deal is that the assets and equity will increase by $ 10,000 2- The second transaction states that the goods were purchased on credit from Anees (creditor / supplier). The effect will increase the business assets (stocks) as well as liabilities (creditor) by $ 300 because the company owes the money to Anis. 3- Salaries are work expenses. When the cash repayment is made, the asset (cash) will be reduced and the equity (equity) also becomes lower by $ 3000 due to this cash advance. 4- Borrowing is like a bank loan, as the business needs money in its operations. The effects of this transaction are that the assets (cash) and liabilities column (bank loan) are also increased by $ 2000. 5- The cash column will include when the company purchases $ 1000 cash goods, it serves as inventory for resale to customers. The asset (cash) will increase and the asset (the inventory) will decrease by $ 1,000 due to this transaction. 6. In this transaction, $ 300 worth of items were sold to Ana on credit terms. The effects will be the depreciation of the asset value (owner's equity). 300 dollars. 7- When the owner repays part of the loan that the company borrows from the bank, the columns of assets (cash) and liabilities (bank loan) can be deducted by $1,000. There is no influence on the capital (equity) column of this transaction. 8- The transaction by the company will be a withdrawal that affects the capital (equity) of the owner. The Cash & Capital column will decrease by $ 500 due to withdrawal. Recorded business transactions affecting the assets, liabilities and capital of the company must be finalized. e 6:
What is the equation budget for each of the following 1- The first transaction means that Safia (the owner) entered a capital of $ 10,000 in cash to start the business. An asset (cash) column is created to record this transaction. The effect of the deal is that the assets and equity will increase by $ 10,000 2- The second transaction states that the goods were purchased on credit from Anees (creditor / supplier). The effect will increase the business assets (stocks) as well as liabilities (creditor) by $ 300 because the company owes the money to Anis. 3- Salaries are work expenses. When the cash repayment is made, the asset (cash) will be reduced and the equity (equity) also becomes lower by $ 3000 due to this cash advance. 4- Borrowing is like a bank loan, as the business needs money in its operations. The effects of this transaction are that the assets (cash) and liabilities column (bank loan) are also increased by $ 2000. 5- The cash column will include when the company purchases $ 1000 cash goods, it serves as inventory for resale to customers. The asset (cash) will increase and the asset (the inventory) will decrease by $ 1,000 due to this transaction. 6. In this transaction, $ 300 worth of items were sold to Ana on credit terms. The effects will be the depreciation of the asset value (owner's equity). 300 dollars. 7- When the owner repays part of the loan that the company borrows from the bank, the columns of assets (cash) and liabilities (bank loan) can be deducted by $1,000. There is no influence on the capital (equity) column of this transaction. 8- The transaction by the company will be a withdrawal that affects the capital (equity) of the owner. The Cash & Capital column will decrease by $ 500 due to withdrawal. Recorded business transactions affecting the assets, liabilities and capital of the company must be finalized. e 6:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:What is the equation budget for each of the following
1- The first transaction means that Safia (the owner)
entered a capital of $ 10,000 in cash to start the
business. An asset (cash) column is created to record
this transaction. The effect of the deal is that the
assets and equity will increase by $ 10,000
2- The second transaction states that the goods were
purchased on credit from Anees (creditor / supplier).
The effect will increase the business assets (stocks)
as well as liabilities (creditor) by $ 300 because the
company owes the money to Anis.
3- Salaries are work expenses. When the cash
repayment is made, the asset (cash) will be reduced
and the equity (equity) also becomes lower by $ 3000
due to this cash advance.
4- Borrowing is like a bank loan, as the business needs
money in its operations. The effects of this transaction
are that the assets (cash) and liabilities column (bank
loan) are also increased by $ 2000.
5- The cash column will include when the company
purchases $ 1000 cash goods, it serves as inventory for
resale to customers. The asset (cash) will increase and
the asset (the inventory) will decrease by $ 1,000 due to
this transaction.
6. In this transaction, $ 300 worth of items were sold to
Ana on credit terms. The effects will be the depreciation
of the asset value (owner's equity). 300 dollars.
7- When the owner repays part of the loan that the
company borrows from the bank, the columns of assets
(cash) and liabilities (bank loan) can be deducted by
$ 1,000. There is no influence on the capital (equity)
column of this transaction.
8- The transaction by the company will be a withdrawal
that affects the capital (equity) of the owner. The
Cash & Capital column will decrease by $ 500 due to
withdrawal. Recorded business transactions affecting
the assets, liabilities and capital of the company must
be finalized.
P 6:
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