Basic Accounting Equation The fundamental accounting equation can be applied to your personal finances. For each of the following transactions, show how the accounting equation would be kept in balance.

Example: Paid for semester’s tuition (decrease assets: cash account; decrease owners’ equity:

expense account increases).

1. Took out a school loan for college.

2. Paid this month’s rent.

3. Sold your old computer for cash at what it cost to buy it.

4. Received week’s paycheck from part-time job.

5. Received interest on savings account.

6. Paid monthly payment on car loan (part of the payment is principal; the remainder is interest).