drill 1 - d2 determining how revenue, expense, and withdrawal transactions change an accounting…

drill 1 - d2 determining how revenue, expense, and withdrawal transactions change an accounting equation\ninstructions: decide which accounts in the accounting equation are changed by each of the following transactions. place a plus (+) in the appropriate column if the account is increased. place a minus (-) in the appropriate column if the account is decreased.\ntransactions\n1. received cash from owner as an investment.\n2. received cash from sales.\n3. paid cash for telephone bill.\n4. paid cash for advertising.\n5. paid cash to owner for personal use.\n6. paid cash for rent.\n7. received cash from sales.\n8. paid cash for equipment repairs.\n9. bought supplies on account from maxwell company.\n10. paid cash for insurance.\n11. received cash from sales.\n12. paid cash on account to maxwell company.

drill 1 - d2 determining how revenue, expense, and withdrawal transactions change an accounting equation\ninstructions: decide which accounts in the accounting equation are changed by each of the following transactions. place a plus (+) in the appropriate column if the account is increased. place a minus (-) in the appropriate column if the account is decreased.\ntransactions\n1. received cash from owner as an investment.\n2. received cash from sales.\n3. paid cash for telephone bill.\n4. paid cash for advertising.\n5. paid cash to owner for personal use.\n6. paid cash for rent.\n7. received cash from sales.\n8. paid cash for equipment repairs.\n9. bought supplies on account from maxwell company.\n10. paid cash for insurance.\n11. received cash from sales.\n12. paid cash on account to maxwell company.

Answer

Explanation:

Step1: Analyze transaction 1

Received cash from owner as an investment increases cash (asset) and owner's equity. So in the 'Cash' column of Assets put +, and in 'Susan Sanders, Capital' column of Owner's Equity put +.

Step2: Analyze transaction 2

Received cash from sales increases cash (asset) and revenue which increases owner's equity. So in the 'Cash' column of Assets put +, and in 'Susan Sanders, Capital' column of Owner's Equity put +.

Step3: Analyze transaction 3

Paid cash for telephone bill decreases cash (asset) and increases an expense which decreases owner's equity. So in the 'Cash' column of Assets put -, and in 'Susan Sanders, Capital' column of Owner's Equity put -.

Step4: Analyze transaction 4

Paid cash for advertising decreases cash (asset) and increases an expense which decreases owner's equity. So in the 'Cash' column of Assets put -, and in 'Susan Sanders, Capital' column of Owner's Equity put -.

Step5: Analyze transaction 5

Paid cash to owner for personal use decreases cash (asset) and owner's equity (withdrawal). So in the 'Cash' column of Assets put -, and in 'Susan Sanders, Capital' column of Owner's Equity put -.

Step6: Analyze transaction 6

Paid cash for rent decreases cash (asset) and increases an expense which decreases owner's equity. So in the 'Cash' column of Assets put -, and in 'Susan Sanders, Capital' column of Owner's Equity put -.

Step7: Analyze transaction 7

Received cash from sales increases cash (asset) and revenue which increases owner's equity. So in the 'Cash' column of Assets put +, and in 'Susan Sanders, Capital' column of Owner's Equity put +.

Step8: Analyze transaction 8

Paid cash for equipment repairs decreases cash (asset) and increases an expense which decreases owner's equity. So in the 'Cash' column of Assets put -, and in 'Susan Sanders, Capital' column of Owner's Equity put -.

Step9: Analyze transaction 9

Bought supplies on account from Maxwell Company increases supplies (asset) and liabilities (accounts - payable to Maxwell Company). So in the 'Supplies' column of Assets put +, and in 'Maxwell Company' column of Liabilities put +.

Step10: Analyze transaction 10

Paid cash for insurance decreases cash (asset) and increases prepaid insurance (asset). Net - change in assets is a shift from cash to prepaid insurance. So in the 'Cash' column of Assets put -, and in 'Prepaid Insurance' column of Assets put +.

Step11: Analyze transaction 11

Received cash from sales increases cash (asset) and revenue which increases owner's equity. So in the 'Cash' column of Assets put +, and in 'Susan Sanders, Capital' column of Owner's Equity put +.

Step12: Analyze transaction 12

Paid cash on account to Maxwell Company decreases cash (asset) and liabilities (accounts - payable to Maxwell Company). So in the 'Cash' column of Assets put -, and in 'Maxwell Company' column of Liabilities put -.

Trans. No. Cash + Supplies + Prepaid Insurance = Maxwell Company + Susan Sanders, Capital
1. + +
2. + +
3. - -
4. - -
5. - -
6. - -
7. + +
8. - -
9. + +
10. - +
11. + +
12. - -