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    ACPS 1 Complete Solutions

    Uploaded by

    Arnel Olsim
    The accounting equation shows assets equal to liabilities plus owner's equity. It was used to record transactions for a new ironing service business. The owner made initial cash investments and purchases of supplies and equipment. Additional transactions included collecting service revenues, paying expenses, receiving payments from customers, and withdrawing cash. The expanded accounting equation separated owner's equity into capital and drawing accounts to further analyze the business's financial activities.

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    ACPS 1 Complete Solutions

    Uploaded by

    Arnel Olsim
    189 views2 pages
    The accounting equation shows assets equal to liabilities plus owner's equity. It was used to record transactions for a new ironing service business. The owner made initial cash investments and purchases of supplies and equipment. Additional transactions included collecting service revenues, paying expenses, receiving payments from customers, and withdrawing cash. The expanded accounting equation separated owner's equity into capital and drawing accounts to further analyze the business's financial activities.

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    The accounting equation shows assets equal to liabilities plus owner's equity. It was used to record transactions for a new ironing service business. The owner made initial cash investments and purchases of supplies and equipment. Additional transactions included collecting service revenues, paying expenses, receiving payments from customers, and withdrawing cash. The expanded accounting equation separated owner's equity into capital and drawing accounts to further analyze the business's financial activities.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    189 views2 pages

    ACPS 1 Complete Solutions

    Uploaded by

    Arnel Olsim
    The accounting equation shows assets equal to liabilities plus owner's equity. It was used to record transactions for a new ironing service business. The owner made initial cash investments and purchases of supplies and equipment. Additional transactions included collecting service revenues, paying expenses, receiving payments from customers, and withdrawing cash. The expanded accounting equation separated owner's equity into capital and drawing accounts to further analyze the business's financial activities.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    PRACTICE SET THE ACCOUNTING EQUATION

    I. THE ACCOUNTING EQUATION


    Write the accounting equation at the top of these three T accounts. Place the abbreviation DR. and
    CR. on the proper side of all T accounts. Also, use a plus or minus sign to indicate the directional
    change each side of the T account represents.

    ~
    ~
    TY

    ~r
    DR. CR. DR. CR.
    - + - +

    + I -
    II. ANALYZING TRANSACTIONS - SAMPLE PROBLEM

    Instructions: Record only the =ent transaction information in T accounts arranged


    according to the Accounting Equation.

    1. Linda Smith, a sophomore at State University, started the Speedy Ironing Service with a $125
    cash investment on Sept. 1, 1991.
    ~ Capital. Linda Smith
    125
    125 I

    2. On Sept. 1, paid $60 for 4 months of ads in the school newspaper.


    Cash

    I 60

    .
    PrepaJ. d Advertising
    60
    I

    3. On Sept. 1, purchased Ironing Supplies for $10 cash.


    Cash

    I 10

    Ironing S~plies
    10 I

    4. On Sept. 1, purchased $60 of Ironing Equipment paying $30 down.


    ~ Accounts Payable

    I 30 I 30

    Ironi:Qg EQ).!j,pment

    60 I

    5. Linda made an additional investment of $25.


    ~

    25 I

    Cap't"" , 'inda2~th

    6. Paid one-half the amount owed on the Ironing Equipment.


    Accounts Payable

    115 15 I

    A4
    III. THE EXPANDED ACCOUNTING EQUATION
    Write the expanded accounting equation at the top of these T accounts. Place the abbreviation DR. and CR.
    on the proper side of all T accounts. Also, use a plus or minus sign to indicate the directional change each
    side of the T account represents.

    ASSEI'S LIABIL.lT.l.l.;S + OWNER's EOUITY


    DR. DR.
    - a;.
    ~R. I CR. I a;. I

    DRAWING
    DR.
    +
    I'
    EXPENSES REVENUES
    DR. DR.
    + -
    I' I a;.
    IV. ANALYZING TRANSACTIONS
    Instructions: Record only the =ent transaction information in T accounts arranged
    according to the expanded Balance Sheet Equation.

    7. Linda withdrew $30 for personal use.


    Cash

    I 30
    Wi~lS

    8. Cash collected for Ironing Services performed during the first month amounted to $150.
    $20 was also due for services rendered.

    .QWl lroniI1g' Revenues

    150 I I 170
    Accounts Receivable

    20 I

    9. Paid September rent of $50 for a roam used when ironing clothes.
    Cash Rent ~es

    I SO
    SO I

    10. Received $10 on account.

    10 I

    Accounts Receivable

    I 10

    11. on Sept. 26, two students each paid $5 for next week's Laundry Service.

    ~ Unearned Ironing Revenue

    10 I I 10

    12. Paid monthly phone bill of $20.


    Cash Tel~hone ~ses

    I 20
    20 I
    AS

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