Podcast
Questions and Answers
What is the effect on assets when paying a creditor £70 in cash?
What is the effect on assets when paying a creditor £70 in cash?
If fixtures are bought for £200 with a cheque, how does this affect capital?
If fixtures are bought for £200 with a cheque, how does this affect capital?
What will happen to liabilities when goods worth £275 are bought on credit?
What will happen to liabilities when goods worth £275 are bought on credit?
What is the total capital balance if the accounting equation is applied with the provided balances?
What is the total capital balance if the accounting equation is applied with the provided balances?
Signup and view all the answers
When J Walker lends the business £200 in cash, what occurs to the assets?
When J Walker lends the business £200 in cash, what occurs to the assets?
Signup and view all the answers
Study Notes
Post Session Activities - Transaction Analysis
-
Transaction: Paying a creditor £70 in cash.
-
Effect on Assets: Cash decreases by £70.
-
Effect on Liabilities: Accounts payable decrease by £70.
-
Effect on Capital: No change.
-
Transaction: Purchasing fixtures for £200 by cheque.
-
Effect on Assets: Fixtures increase by £200, Cash decreases by £200.
-
Effect on Liabilities: No change.
-
Effect on Capital: No change.
-
Transaction: Purchasing goods on credit for £275.
-
Effect on Assets: Inventory increases by £275.
-
Effect on Liabilities: Accounts payable increase by £275.
-
Effect on Capital: No change.
-
Transaction: Proprietor invests £600 into the business.
-
Effect on Assets: Cash increases by £600.
-
Effect on Liabilities: No change
-
Effect on Capital: Capital increases by £600.
-
Transaction: J Walker lends the Business £200 in cash.
-
Effect on Assets: Cash increases by £200.
-
Effect on Liabilities: Loan payable increases by £200.
-
Effect on Capital: No change.
-
Transaction: A debtor pays £50 by cheque.
-
Effect on Assets: Cash increases by £50.
-
Effect on Liabilities: Accounts receivable decrease by £50.
-
Effect on Capital: No change.
-
Transaction: Returning goods costing £60 to a supplier.
-
Effect on Assets: Inventory decreases by £60, Accounts payable decrease by £60.
-
Effect on Liabilities: No change.
-
Effect on Capital: No change.
-
Transaction: Purchasing additional shop premises for £5000 by cheque.
-
Effect on Assets: Premises increase by £5000, Cash decreases by £5000.
-
Effect on Liabilities: No change.
-
Effect on Capital: No change.
Capital Balance Calculation
-
Trade receivables: £65,250
-
Trade payables: £38,650
-
Inventory: £35,280
-
Premises: £160,000
-
Motor vehicles: £32,250
-
Fixtures and fittings: £16,900
-
Plant and equipment: £8,650
-
Loan: £6,590
-
Bank: £9,800
-
Calculate the total assets: Sum all asset balances (Trade receivables + Inventory + premises + Motor vehicles + Fixtures and fittings + Plant and equipment + Bank)
-
Calculate the total liabilities: Sum all liability balances (Trade payables + Loan).
-
Capital = Total Assets - Total Liabilities
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz focuses on the effects of various transactions on assets, liabilities, and capital in accounting practices. Each scenario illustrates the impact of specific financial activities, helping students understand transaction analysis effectively. Perfect for anyone looking to strengthen their grasp of accounting fundamentals.
