Question

Show the effect on the basic accounting equation of each of the following five transactions. 1....

Show the effect on the basic accounting equation of each of the following five transactions.

1. You sell $100 worth of goods to a customer on account. They cost you $50.

2. Your customer pays you for the goods you sold in #1.

3. You receive a bill for electricity used last month, and you pay it right away.

4. Another customer pays you for goods you will sell to him next month.

5. You provide the goods to the customer in #4.

Business   Accounting   
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Answer #1
Assets = Liabilities + Stockholders Equity
Cash Accounts receivable Inventory Unearned revenue Common stock Retained earnings
1 $                                  100 $            (50) $50
2 $           100 $                                (100)
3 Decrease Decrease
4 Increase Increase
5 Decrease Decrease Increase
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