ACT 210-20FA-01 - Financial Accounting for Decision Making Spring 2021 - Week 1 In-class Activity E-F: 1-19 Using Accounting Vocabulary 1. Accounting Equation 2. Asset 3. Balance sheet a. Reports on an entity's assets, liabilities, and stockholders' equity as of a specific date. b. The basic tool of accounting, stated as Assets = Liabilities + Equity C. An economic resource that is expected to be of benefit in the future d. Reports an entity's revenues, expenses, and net income or loss for the period e. Decreases in equity that occur in the course of selling goods or services 4. Expense 5. Income Statement E-F: 1-26 Using the accounting equation to analyze business transactions. Indicate the effects of the following business transactions on the accounting equation of Vivian's Online Video Store. Use the following accounts: Cash, Accounts Receivable, Office Supplies, Office Equipment, Office Furniture, Accounts Payable, Common Stock, Dividends, Rental Revenue, and Rent Expense. Transaction (a) is answered as a guide. A. Received cash of $10,000 from issuance of common stock. Answer: Increase asset (cash); Increase equity (common stock) B. Earned video rental revenue on account, $2,800 C. Purchased office furniture on account, $300. D. Received cash on account, $400 E. Paid cash on account, $100. F. Rented videos and received cash of $200. G. Paid monthly office rent of $1,000. H. Paid $100 cash to purchase office supplies. 11 Page Exercise #3: Use the following account balances to prepare the income statement for Abigail Photocopying Services at December 31, 2025. Equipment Office Supplies Notes Payable Supplies Expense Utilities Expense $22,000 800 10,000 3,000 1,000 Service Revenue Accounts Receivable Salaries Expense Rent Expense Transportation Expense $35,000 6,000 4,000 2,500 900