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    Accounting Equation

    Uploaded by

    Darab Akhtar
    The document outlines 7 common business transactions and how they affect the accounting equation: 1) Starting a business increases assets and capital through cash or cash and stock. 2) Purchasing goods decreases cash and increases stock through cash, or increases creditors and stock through credit. 3) Purchasing assets decreases cash and increases assets through cash, or increases creditors and assets through credit. 4) Selling goods for a profit increases cash or debtors, capital, and decreases stock. 5) Selling goods at a loss increases cash or debtors and decreases capital and stock. 6) Paying expenses decreases cash and capital. 7) Receiving income increases cash and capital.

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    Accounting Equation

    Uploaded by

    Darab Akhtar
    4 views1 page
    The document outlines 7 common business transactions and how they affect the accounting equation: 1) Starting a business increases assets and capital through cash or cash and stock. 2) Purchasing goods decreases cash and increases stock through cash, or increases creditors and stock through credit. 3) Purchasing assets decreases cash and increases assets through cash, or increases creditors and assets through credit. 4) Selling goods for a profit increases cash or debtors, capital, and decreases stock. 5) Selling goods at a loss increases cash or debtors and decreases capital and stock. 6) Paying expenses decreases cash and capital. 7) Receiving income increases cash and capital.

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    financial accounting

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    The document outlines 7 common business transactions and how they affect the accounting equation: 1) Starting a business increases assets and capital through cash or cash and stock. 2) Purchasing goods decreases cash and increases stock through cash, or increases creditors and stock through credit. 3) Purchasing assets decreases cash and increases assets through cash, or increases creditors and assets through credit. 4) Selling goods for a profit increases cash or debtors, capital, and decreases stock. 5) Selling goods at a loss increases cash or debtors and decreases capital and stock. 6) Paying expenses decreases cash and capital. 7) Receiving income increases cash and capital.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    4 views1 page

    Accounting Equation

    Uploaded by

    Darab Akhtar
    The document outlines 7 common business transactions and how they affect the accounting equation: 1) Starting a business increases assets and capital through cash or cash and stock. 2) Purchasing goods decreases cash and increases stock through cash, or increases creditors and stock through credit. 3) Purchasing assets decreases cash and increases assets through cash, or increases creditors and assets through credit. 4) Selling goods for a profit increases cash or debtors, capital, and decreases stock. 5) Selling goods at a loss increases cash or debtors and decreases capital and stock. 6) Paying expenses decreases cash and capital. 7) Receiving income increases cash and capital.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

     

    Accounting Equation 

    Frequent Transaction 
    1. Start business 
     With cash    Cash    Add    Capital  Add 
     With cash & stock  Cash and Stock Add    Capital  Add 
    2. Purchase Goods 
     Cash      Cash    Deduct   Stock   Add 
     Credit     Creditor  Add    Stock  Add 
    3. Purchase Assets 
     Cash      Cash     Deduct   Assets  Add 
     Credit     Creditor  Add    Assets  Add 
    4. Sold Goods on Profit 
     Cash      Cash (SP)  Add    Capital  Add (Profit)    Stock   Deduct (Cost) 
     Credit     Debtors  (SP)  Add    Capital  Add (Profit)    Stock  Deduct (Cost)   
    5. Sold Goods on Loss 
     Cash      Cash (SP)  Add    Capital Deduct (Loss)    Stock  Deduct (Cost) 
     Credit     Debtors  (SP)  Add    Capital Deduct (Loss)    Stock  Deduct (Cost) 
    6. Expenses Paid     Cash    Deduct   Capital Deduct  
    7. Income Received    Cash    Add    Capital Add    

    Accounting Equation 

    Assets    =  Capital  +  Liabilities 

    Liabilities  =  Assets  ‐  Capital   

    Capital (Net Worth)    =  Assets  ‐  Liabilities 

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