LESSON 2-3
Analyzing How
Transactions Affect
Owner’s Equity Accounts
Analyze transactions.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
2
Competency: Understanding the
Accounting Cycle for a Service Business
Objectives:
35 Demonstrate the effects of
transactions on the accounting
equation.
40 Analyze transactions through the
use of T accounts.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
3
Chapter 2 Objectives
 Define accounting terms related to analyzing transactions
into debit and credit parts.
 Identify accounting practices related to analyzing
transactions into debit and credit parts.
 Use T accounts to analyze transactions showing which
accounts are debited or credited for each transaction.
 Analyze how transactions to set up a business affect
accounts.
 Analyze how transactions affect owner’s equity accounts.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
4
RECEIVED CASH FROM SALES
page 38
August 12. Received cash from sales, $295.00.
2
1
2
1
4
4
3
3
1. Which accounts are affected?
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
5
SOLD SERVICES ON ACCOUNT
page 39
August 12. Sold services on account to Oakdale School, $350.00.
2
1
2
1
4
3
4
3
1. Which accounts are affected?
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
6
PAID CASH FOR AN EXPENSE
page 40
August 12. Paid cash for rent, $300.00.
1
2
3
2
4
3
1
4
1. Which accounts are affected?
3
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
7
RECEIVED CASH ON ACCOUNT
page 41
August 18. Received cash on account from Oakdale School, $200.00.
2
1
4
1
4
3
3
1. Which accounts are affected?
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
8
PAID CASH TO OWNER
FOR PERSONAL USE
page 42
August 12. Paid cash to owner for personal use, $125.00.
2
1
3
4
3
1
2
4
1. Which accounts are affected?
3
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
9
Exit Ticket for Chapter 2-3
In a Word Document, SaveAS: Chapter2-3AYUYourName
Drop a copy in my InBox today before you leave!
1. What two accounts are affected when a business
receives cash from sales?
2. What two accounts are affected when services are sold
on account?
3. What two accounts are affected when a business pays
cash to the owner for personal use?
4. Are revenue accounts increased on the debit side or
credit side? Explain why.
5. Are expense accounts increased on the debit side or
credit side?
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3
10
Chapter 2-3 Assignments
Complete on Aplia




Work Together 2-3
On Your Own 2-3
Application Problem 2-3
Application Problem 2-4
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 2-3