U1 Review Define the following terms: assets, liabilities, and equity. Provide two examples of each of...

U1 Review

Define the following terms: assets, liabilities, and equity.

Provide two examples of each of the following terms: assets, liabilities, and equity.

Provide two examples of expenses a business might incur.

Read the items below and indicate whether the account type is increased with a debt or credit.
_____ a. Asset
_____ b. Liabilities
_____ c. Equity
_____ d. Revenue
_____ e. Expenses

Classify each of the following items as assets (A), liabilities (L), equity (EQ), revenue (R), or expense (E)
_____ a. Land
_____ b. Owner, capital
_____ c. Fees earned
_____ d. Equipment
_____ e. Telephone bill
_____ f. Accounts payable
_____ g. Unearned revenue
_____ h. Accounts receivable
_____ i. Supplies
_____ j. Rent

Following are the transactions of a new company called Pose-for-Pics.

Aug.1	Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company.
Aug.1	Paid $2,100 for August rent
Aug.5	The company purchased office supplies for $880 cash.
Aug.20	The company received $3,331 cash in photography fees earned.
Aug.31	The company paid $675 cash for August utilities.

Solutions

Expert Solution

Assets: Assets are something that enable a business to earn in coming future and to pay off its obligations. Example include Cash, Plant Assets, etc
Liabilities: Liabilities are the obligations that a business have to pay during its course. These include accounts payable, borrowings, etc.
Equity: Equity is the capital contributed by owner or stockholder and also include the balance of profits and losses earned throughout business’ life
Two examples of expenses: Advertising expense, Rent expense
Asset: Increase with a debit
Liabilities: Increase with a credit
Equity: Increase with a credit
Revenues: Increase with a credit
Expenses: Increase with a debit
Land: Assets
Owner Capital: Equity
Fees Earned: Revenues
Equipment: Assets
Tel phone bill: Expenses
Accounts payable: Liabilities
Unearned revenue: Liabilities
Accounts receivables: Assets
Supplies: Assets
Rent: Expenses
Journal Entries

Date	General Journal	Debit ($)	Credit ($)
Aug-01	Cash	6500
	Equipment	33500
	Owner's Capital		40000

Aug-01	Rent Expenses	2100
	Cash		2100

Aug-05	Office Supplies	880
	Cash		880

Aug-20	Cash	3331
	Fees earned		3331

Aug-31	Utilities expenses	675
	Cash		675

ekkarill92 answered 1 year ago

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