Question
Question 1: F or each of the transactions identified, state how the asset, liability and/or equity accounts increase ( ) , decrease ( ) or
Question 1: For each of the transactions identified, state how the asset, liability and/or equity accounts increase (), decrease () or remain unchanged (-). Name the account. (a. is an example) (20 Marks)
|
| ASSETS (A) | = | LIABILITIES (L) | + | EQUITY (E) |
| a. Obtained a loan to purchase equipment for $65 000.
| Equipment $65 000 |
| Loan $65 000 |
|
|
| b. Customer pays $2000 of $5000 owing for services provided. |
|
|
|
|
|
| c. A trade receivable, who owes $6000, made a part payment of $2000.
|
|
|
|
|
|
| d. The owners took $5000 in inventory for personal use but returned $2500 on same day
|
|
|
|
|
|
| e. Returned supplies (faulty) $2000 previously paid on credit
|
|
|
|
|
|
| f. Invoice raised for sales of $5200
|
|
|
|
|
|
| g. Paid rent $4000 with 30% being a prepayment |
|
|
|
|
|
| h. Paid personal tax $7000 and company tax $8200
|
|
|
|
|
|
| i. Interest accrued (not paid) on bank loan at the end of the month $2750 and principal of $10000 paid
|
|
|
|
|
|
| j. The business purchases supplies on credit $4400
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started