Entering transactions in the accounting equation (Learning Objective 5 )

5–10 min.

Sanchez Towing Service, Inc., earns service revenue by towing vehicles for AAA.

Sanchez Towing Service’s main expenses are the salaries paid to its employees. Account for the following transactions in the expanded accounting equation:

a. Sanchez Towing Service, Inc., earned $62,000 of service revenue on account.

b. Sanchez Towing Service, Inc., paid $33,000 in salaries expense.

AppendixLO1