Accounting: the accounting equation.
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Pat Jones invests personal funds to start his own law practice. The following transactions occur during the first month of operation of the proprietorship. For each transaction, insert "I" for increase and "D" for decrease in the apporpriate columns to indicate an increase or decrease in asset, liabilities, or owner's equity. If appropriate, insert more than one letter in a column.
A = Asset L = liabilities OE = Owner's Equity
A L OE
a. Received cash from owner as an investment ____ ____ ____
b. Purchased supplies on account ____ ____ ____
c. Paid rent for the current month ____ ____ ____
d. Borrowed money from a bank ____ ____ ____
e. Received cash for services sold to customers ____ ____ ____
f. Paid cash to creditor for purchases in (b) ____ ____ ____
g. Charged customers for services sold on acct. ____ ____ ____
h. Received cash on account from customers ____ ____ ____
i. Owner withdrew cash for personal use ____ ____ ____
j. Paid electricity bill ____ ____ ____
k. Paid wages ____ ____ ____
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Solution Summary
The problem deals with classifying items according to the accounting equation.
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PRINCIPLES OF ACCOUNTING
Pat Jones invests personal funds to start his own law practice. The following transactions occur during the first month of operation of the proprietorship. For each transaction, insert "I" for increase and "D" for decrease in the appropriate columns to indicate an increase or decrease in assets, liabilities, or owner's equity. If appropriate, insert more than one letter in a column.
A = Asset, L = liabilities, OE = Owner's Equity
A L ...
Education
- B. Sc., University of Nigeria
- M. Sc., London South Bank University
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