Question

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

Answer 1

Please comment for any explanation,

Thanks,