Chapter 1, Problem E1.26E

Using the accounting equation to analyze business transactions

Learning Objective 4

Indicate the effects of the following business transactions on the accounting equation of Vivian's Online Video store. Transaction (a) is answered as a guide.

a. Received cash of 510,000 from owner and gave capital.
Answer Increase asset (Cash); Increase equity (Vivian, Capital)
b. Earned video rental revenue on account, $2,800.
c. Purchased office furniture on account, $300.
d. Received cash on account, 5400.
e. Paid cash on account, $100.
f. Rented videos and received cash of $200.
g. Paid monthly office rent of $1,000.
h. Paid $100 cash to purchase office supplies.