Lesson 3 – Assignment 2

For each of the transactions listed below,

 determine the balance sheet accounts affected;
 indicate whether they are increased or decreased, and;
 state the value of the change.

Increase Decrease Amount

Equipment $2 000
Example: Purchased equipment for $2 000 cash.
Cash $2 000

Cash $1 800
a) Received $1 800 payment from customers for
previous purchases on credit. Credit $1 800

Bank $5 000
b) Owner invested $5 000 in the business.
Capital $5 000

c) Paid salaries totaling $2 000 to employees. Bank $2 000

Accounts
$2 000
payable

d) Purchased $15 000 automobile on credit. Automobile $15 000

Bank $15 000

e) Purchased new office building; paid $200 000 cash Office $200 000
and took out mortgage for $300 000. building

Cash $200 000

Mortgage $300 000

f) Received $850 for the sale of an old piece of Accounts $850

equipment. Receivable

Equipment $850

g) Paid $890 for repairs to building. Repairs $890

Hint: When repairs occur, this does not increase the

value of the building but rather reduces owner’s Accounts
$890
equity. payable

h) Paid $8 000 toward amount owing for automobile Loan $8 000

purchased previously.
Accounts
$8 000
payable
Lesson 3 – Assignment 2
 Lesson 3 – Assignment 2
Increase Decrease Amount

i) Performed accounting services for $4 500 and was Cash $4 500

paid cash.
Accounts
$4 500
receivable

j) Sent a bill for $4 200 to a customer for accounting Accounts $4 200

services; to be paid later. receivable

Accounts $4 200
payable