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Questions and Answers
What is the effect of Benjamin's cash investment on the accounting equation?
How does the purchase of office equipment in cash affect the accounting equation?
What is the impact of rendering services to Mr. Elias on account?
How does buying furniture on account affect the accounting equation?
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What effect does receiving cash for services have on the accounting equation?
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How does receiving proceeds from a loan impact the accounting equation?
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What happens to the owner's equity when assets increase according to the text?
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In accounting, a transaction is characterized by all of the following EXCEPT:
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What happens to the owner's equity when assets decrease based on the text?
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Which account would be affected when a business renders services on account?
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When a business receives cash from rendering services, what happens to the Cash account?
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If assets increase, and liabilities remain the same, what happens to the owner's equity?
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What is the total amount withdrawn by Miss Madrid for personal use?
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On January 15, what was the amount earned from rendering photocopying services to various customers?
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Which account represents the owner's investment in the business?
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What is the total amount of assets after buying supplies costing ₱5,000.00 on January 18?
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On what date was a helper hired on a commission basis of 10% of sales?
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Study Notes
Accounting Equation Examples
- Assets increased by P 200,000.00 and owner's equity also increased by the same amount when Saniata Madrid invested cash on January 1.
- Assets decreased and owner's equity also decreased when assets decreased on May 17.
Business Transactions and Accounting Equation
- A transaction is characterized by an exchange of values between two parties in terms of money.
- Transaction affects the accounting equation (Assets = Liabilities + Owner's Equity).
Saniata's Xerox Transactions
- On January 1, Saniata Madrid invested cash P 200,000.00 and equipment worth P 60,000.00.
- Purchased tools for cash P 20,000.00 on an unknown date.
- Purchased equipment on account for P 30,000.00 from Freddie Car and Auto Supplies on an unknown date.
- Received cash from various customers P 6,500.00 on an unknown date.
- Paid 50% of its account due to Freddie's Car and Auto Supplies on an unknown date.
- Billed customers for the repairs of their cars, P 35,000.00 on an unknown date.
- Madrid withdrew cash amounting to P 50,000.00 on an unknown date.
- Collected P 20,000.00 from customers who were billed on an unknown date.
- Paid salaries of employees, P 10,000.00, and utilities P 4,500.00 on an unknown date.
Transaction Summary Table
- Use "+" to indicate increase and "-" to indicate decrease in account values.
- Determine the effect of each transaction on the accounting equation.
Benjamin's Investments and Services
- Invested P 300,000.00 cash.
- Purchased office equipment in cash, P 100,000.00.
- Rendered service to Mr. Elias on account, P 50,000.00.
- Bought furnitures on account, P 25,000.00.
- Received cash services, P 40,000.00.
- Received proceeds from loan, P 300,000.00.
- Made a partial payment for the furnitures, P 15,000.00.
- Paid salaries of employees P 30,000.00.
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Description
Test your understanding of accounting transactions by analyzing a sample transaction and identifying the corresponding changes in assets, liabilities, and owner's equity. This quiz includes details such as expenses, assets, liabilities, and owner's equity accounts.
