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Exercises 1

The document contains a series of accounting exercises where items are classified as assets, liabilities, equity, expenses, revenues, or dividends. It also includes a section for analyzing the effects of various business transactions on the basic accounting equation. The responses indicate increases or decreases in assets, liabilities, and equity based on the transactions described.

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5 views

Exercises 1

The document contains a series of accounting exercises where items are classified as assets, liabilities, equity, expenses, revenues, or dividends. It also includes a section for analyzing the effects of various business transactions on the basic accounting equation. The responses indicate increases or decreases in assets, liabilities, and equity based on the transactions described.

Uploaded by

os10289387397368368
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Read and answer the following questions in the appropriate specified place:

Q1: For the items listed below, fill in the appropriate code letter to indicate
whether the item is an asset, liability, or equity item.
Code
Asset A
Liability L
Equity E
Expense Ex
Revenue Re
Dividends Div

_____ 1. Rent Expense _____ 6. Cash

_____ 2. Equipment _____ 7. Accounts Receivable

_____ 3. Accounts Payable _____ 8. Dividends

_____ 4. Share Capital-Ordinary _____ 9. Service Revenue

_____ 5. Insurance Expense _____ 10. Notes Payable

Q2: Analyze the transactions of a business organized as a proprietorship


described below and indicate their effect on the basic accounting equation. Use
a plus sign (+) to indicate an increase and a minus sign (–) to indicate a decrease.

Assets = Liabilities + Equity

1. Received cash for services rendered. _______ _______

2. Purchased office equipment on credit. _______ _______

3. Paid employees' salaries. _______ _______

4. Received cash from customer in


payment on account. _______ _______

5. Paid telephone bill for the month. _______ _______

6. Paid for office equipment purchased


in transaction 2. _______ _______

7. Purchased office supplies on credit. _______ _______

8. Paid dividends. _______ _______

9. Obtained a loan from the bank. _______ _______

10. Billed customers for services rendered. _______ _______


Q2 Solution :
Assets = Liabilities + Equity

1. Received cash for services rendered. + +

2. Purchased office equipment on credit. + +

3. Paid employees' salaries. – –

4. Received cash from customer in +,–


payment on account.

5. Paid telephone bill for the month. – –

6. Paid for office equipment purchased


in transaction 2. – –

7. Purchased office supplies on credit. + +

8. Paid dividends – –

9. Obtained a loan from the bank. + +

10. Billed customers for services rendered. + +

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