(a) For each of the following transactions, show the effect (as pluses and minuses) on assets, liabilities and equity. The first has been completed for illustration.

Assets Liabilities Equity £ £ £
1 Owner starts business with £10,000 paid into a business bank account on 1 May +£10,000 Bank +£10,000 (equity)
2 Business buys furniture with a cheque for £2,500 on 2 May 3 Business pays £600 by cheque for a photocopier on 4 May 4 Business receives an invoice on 5 May from Chambers Ltd for £2,000 for inventory 5 Also on 5 May, the business buys inventory with a cheque for £600 6 Owner takes £400 from bank for personal spending money on 6 May 7 On 7 May, the business pays the invoice received from Chambers Ltd on 5 May 8 On 8 May, the business receives an invoice for £4,000 for a motor van Summary (overall change)

(b) From the above table, complete the following:
Overall change in assets Less overall change in liabilities ___________________ Overall change in equity ___________________

(c) What is the name given to the formula Assets - Liabilities = Equity?