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 |
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b. Customer pays $2000 of $5000 owing for services provided. |
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c. A trade receivable, who owes $6000, made a part payment of $2000.
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d. The owners took $5000 in inventory for personal use but returned $2500 on same day
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e. Returned supplies (faulty) $2000 previously paid on credit
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f. Invoice raised for sales of $5200
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g. Paid rent $4000 with 30% being a prepayment |
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h. Paid personal tax $7000 and company tax $8200
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i. Interest accrued (not paid) on bank loan at the end of the month $2750 and principal of $10000 paid
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j. The business purchases supplies on credit $4400
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