Accounting 11
Exercise 3-3
1. What 4 steps should be used to analyze the changes caused by a transaction?
2. Why must accounting be done accurately?
3. What can be used as a clue as to whether capital has increased or decreased?
4. If assets increase by $10 000, with no change in liabilities, what change would there be in
capital, or equity?
5. Analyze the 10 transactions listed in the following chart. For each transaction, do the following:
a. Record each account that will change and their amounts (use a + or – sign).
b. Show the effect on the owner’s equity
c. After each transaction, check that the accounting equation is still in balance
Step One
Assets
Item
$Change
1. Bought $350 of
supplies w/ cash
2. Paid telephone bill,
$45 cash
3. Paid $500 to reduce
the bank loan
4. Sold services for
$1000 cash
5. An accounts
receivable customer
pays us $600
6. Paid wages $800
7. Sold services for
$2000 on credit
8. Paid an accounts
payable vendor $750
9. Bought $4500 of
Liabilities
Item
$Change
Increase
Step Two
Decrease No
change
$ Change
equipment on credit
10. Furniture valued ate
$400 was destroyed.
A=
L
+
OE
6. Examine the chart below. The scale of each unit is $100.
Total Liabilities
L
Total Assets
A
24
18 20
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 16
22
25
15 17 19 21 23
a. How much are the total assets?
b. How much are the total liabilities?
c. Calculate the capital (equity):
d. Add the Capital to the chart (C) :
Now assume that a new desk is purchased for $200 cash.
e. What would the new assets be ?
f. What would the new liabilities be ?
g. Has the capital changed?