Seatwork No. 1 The Accounting Process
Fundamentals of Accounting
Exercise No. 1 (10 minutes)
Show that the accounting equation is satisfied after taking into consideration each of the
following transactions in the books of Mommy D.
Example: Purchase of inventory on account for P10,000
A=L+E
(Inventory) P10,000 = (Accounts Payable) P10,000 + 0
1. (Cash) P1,000,000 = 0 + (Owner’s Capital) P1,000,000
2. (Furniture) P25,000 - (Cash) P25,000= 0+0
3. (Goods) P20,000 - (cash) P20,000 = 0+0
4. (Goods) P5,000 = (Accounts payable) P5,000 + 0
5. (Goods) P 15,000- (Cash) P15,000= 0+0
6. (Goods) P8,000 – (Accounts Receivable) P8,000 = 0+0
7. (Cash) P4,000 = (Accounts Payable) P4000 +0
8. (cash)P5,000 - (Accounts receivable) P 5,000
9. (Cash) P 25,000= Accounts payable (P25,00)
10. (Cash) P10,000 = 0+ Owner’s withdrawal P10,000
Exercise No. 2 (10 minutes)
Following are the accounting transactions relating to Ms. SAZ's business. Use the accounting
equation to show their effect on his assets, liabilities, and capital.
1. Asset (Arrow up) = Liabilities + owner’s equity (arrow Up)
2. Asset(Arrow up) (arrow down) = Liabilities + owner’s equity
3. Asset(arrow Up) (arrow down) = Liabilities + owner’s equity
4. Asset (Arrow up)= Liabilities(Arrow up) + owner’s equity
5. Asset(arrow down)(arrow up) = Liabilities + owner’s equity
6. Asset (arrow down)= Liabilities (arrow down) + owner’s equity
7. Asset (arrow up ) (arrow up) = Liabilities + owner’s equity
8. Asset (arrow down) = Liabilities (arrow down) + owner’s equity
9. Asset (Arrow down) = Liabilities (arrow down)+ owner’s equity
10. Asset (arrow up) (arrow down)= Liabilities + owner’s equity