Chapter 1, Problem E1.27E

Using the accounting equation to analyze business transactions

Learning Objective 4

Indicate the effects of the following business transactions on the accounting equation for Sam's Snack Foods, a supplier of snack foods. Transaction (a) is answered as a guide.

a. Sam's Snack Foods received cash from owner and gave capital.
Answer: Increase asset (Cash); Increase equity (Sam, Capital)
b. purchase of land for a building site.
c. Paid cash on accounts payable.
d. Purchased equipment; signed a note payable.
e. Performed service for a customer on account.
f. Employees worked for the week but will be paid next Tuesday.
g. Received cash from a customer on accounts receivable.
h. Borrowed money from the bank.
i. Owner withdrew cash.
j. Incurred utilities expense on account.