Question 1: For each of the transactions identified, state how the asset, liability and/or equity accounts...

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)

	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

Expert Solution

ekkarill92 answered 1 year ago

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