Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owner's equity by inserting "+" for increase and "-" for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column.
(a) Received cash from owner as an additional investment
(b) Purchased supplies on account
(c) Paid rent for the current month
(d) Received cash for services sold to customers
(e) Returned some defective supplies purchased in (b)
(f) Paid insurance premiums in advance
(g) Paid cash to creditor for purchases in (b)
(h) Charged customers for services sold on account
(j) Received cash on account from customers
(k) Owner withdrew cash for personal use
(m) Received invoice for electricity used
(n) Paid wages
(o) Purchased a truck for cash
+
-
-
+
A
-
+
+
+
-
+
+
L
-
-
-
OE
+
Henry’s Taxes, a tax preparation business had the following transactions during the month of April:
Example: Received cash the owner Henry, $15,000.
1. Received cash for providing accounting services, $8,000.
2. Billed customers on account for providing services, $4,000.
3. Paid advertising expense, $400.
4. Received cash from customers on account, $3,500.
5. Owner made a withdrawal, $1,000.
6. Received telephone bill, $100.
7. Paid telephone bill, $100.
Required:
1) In the table below, state the accounts affected by each transaction.
2) Indicate the effect on the accounting equation of each transaction.
Assets = Liabilities
+ Owner’s Equity
Ex. Cash +15,000 +15,000
1.+8,000 +8000
2.
3.
-4,000
4.+3,500
5.-1,000
6.
7.-100
-400
+100
-4,000
-400
+3,500
-1000
-100
+100

Journalize the following selected transactions for August 2008 in a two-column journal. Journal entry explanations may be omitted.
Aug 1 Received cash from the investment made by the owner, Geoff Smith, $15,000.
2 Received cash for providing accounting services, $8,000.
3 Billed customers on account for providing services, $4,000.
4 Paid advertising expense, $400.
5 Received cash from customers on account, $3,500.
6 Geoff Smith, owner, withdraws, $1,000
7 Received telephone bill, $100
8 Paid telephone bill, $100.
Date
Aug 1
Description
Cash
Capital
Post Ref Debit
15000
Credit
15000
Aug 2 Cash
Professional Fees (revenue)
8000
8000
Aug 3 4,000
Aug 4
Aug 5
Aug 6
Account receivable
Professional Fees
Expense
Cash
Account receivable
Sales
Drawing
Cash
400
3500
1000
4,000
400
3500
1000
Aug 7
Aug 8
Account payable (liabilities)
Cash
Utilities expense
Cash
100
100
100
100