1. A student intern lists the assets, liabilities, and equity of the company as follows:

Assets	Liabilities	Equity
Motor vehicles 2-year bonds issued to the public Cash at bank Capital Surplus	Trade payables Accounts receivable Stated capital Tax payable	Cash on hand Income surplus Bank overdraft

Required: Indicate which items have been put under the wrong class.

2. The transactions listed below relate to the business of John company Ltd

(a) Cash withdrawal from the companys bank account, $16,000.

(b) Raw materials purchased for $8,000 on credit.

(c) Paid outstanding utility bills $4,000 by cheque.

Required: State the effect of each of the transactions on the entitys accounting equation. That is which element(s) in the equation will change and would that cause the accounting equation to increase, decrease or remain the same.