Republic of the Philippines

NUEVA VIZCAYA STATE UNIVERSITY

3700 Bayombong, Nueva Vizcaya

Direction: Fill up the financial transaction worksheet by analyzing the given problems and balance the accounting
equation. Put parenthesis on amounts that need to be deducted to indicate the decrease in accounts.

During September 2023, the first month of operations on Al-Al-Iti, these various financial transactions took place.

Sept. 1 Alfonso Hennessy started a new business by depositing P600,000 in the name of Al-Al-Iti Express.
Sept. 5 The business acquired computer equipment costing P178,000 on cash basis.
Sept. 9 Purchased on account computer supplies amounting to P9,000.
Sept 10 Signed a purchase agreement for a second-hand vehicle amounting to P750,000. Made a
downpayment of P100,000.
Sept 11 Hired an admin staff for a monthly salary of P8,000. Salaries are to be paid every end of month.
Sept 12 Al-Al-Iti Express collected P77,000 in cash for finishing a website for a customer.
Sept 13 Alfonso had dinner with Rosé in a 3-star fancy restaurant and paid P30,000. Rosé is Alfonso’s girlfriend
of 4 years.
Sept 16 Alfonso paid for the semi-monthly utilities amounting to P16,000.
Sept 17 Alfonso billed clients for services rendered for the month, P60,000.
Sept 18 The business owner, Alfonso, paid for the delivery package of Rosé which was sent to the business
address of Al-Al-Iti Express. The package cost P15,000
Sept 19 Made a partial payment of P7,000 for the September 9 purchase.
Sept 20 Checks totaling P17,000 were received from clients previously billed.
Sept 21 Gave in advance the salary of the admin staff for the month.
Sept 23 Alfonso withdrew P75,000 from the business for the beach-hopping with Rosé.
Sept 27 ShotPun-o Publishing submitted a bill to Alfonso for P10,000 worth of internet advertisements.
Alfonso will pay the bill next month.
Sept 30 The business acquired a loan from BPO Bank to pay half of the remaining amount to be paid for the
second-hand vehicle.

Analyze the transactions of a business organized as a proprietorship described below and indicate their effect on the
basic accounting equation. Determine the accounts affected for each transaction and indicate an increase or
decrease using (DR) and (CR).

1. The owner invested cash to start the business.

2. Paid for business permits and licenses to operate.
3. Paid for a one-year rental of the building to house the business.
4. Received cash for services rendered.
5. Purchased five (5) units of equipment paying 50% of downpayment and the balance on account.
6. Received cash from customer in payment on account.
7. Bought various supplies for cash.
8. Received cash for services yet to be rendered.
9. Purchased supplies on credit.
10. Rendered services on account.
11. Obtained a loan from the bank.
12. Billed customers for services rendered.
13. Paid half the balance on the equipment purchased on account.
14. Withdrawal of owner of cash for personal use.
15. Purchased machineries for cash.
16. Paid monthly maintenance of the equipment.
17. Paid telephone bill for the month.
18. Paid this month and next month’s salary of staff and employees.
19. Paid the first installment for the loan obtained from the bank plus interest.
20. Purchased a one-year insurance for the building.

Example:

TRANSACTION ASSETS LIABILITIES OWNER’S EQUITY

1. Owner invested vehicle in the business EQUIPMENT (DR) CAPITAL (CR)

Assignment I – ACCOUNTING EQUATION