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Activity No. 1-1 Transaction Effects On The Basic Accounting Model

The document describes how different business transactions affect the basic accounting model of assets, liabilities, and equity. It provides a table to indicate whether each type of transaction increases (+), decreases (-), or does not change (0) the various accounting categories. It then provides a scenario of transactions by a freight company and asks the reader to identify the effect of each using letter codes like A) Increase one asset and decrease another.

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Yumie Valdespiñosa
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986 views1 page

Activity No. 1-1 Transaction Effects On The Basic Accounting Model

The document describes how different business transactions affect the basic accounting model of assets, liabilities, and equity. It provides a table to indicate whether each type of transaction increases (+), decreases (-), or does not change (0) the various accounting categories. It then provides a scenario of transactions by a freight company and asks the reader to identify the effect of each using letter codes like A) Increase one asset and decrease another.

Uploaded by

Yumie Valdespiñosa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Transaction Effects on the Basic Accounting Model

For each transaction, indicate whether the assets, liabilities or owner’s equity increased (+), decreased (-)
or did not change (0) by placing the sign in the appropriate column.

Assets Liabilities Equity

a. Received cash as additional investment ________ ________ ________

b. Purchased supplies on account. ________ ________ ________

c. Charged customers for services rendered. ________ ________ ________

d. Rendered services for cash customers. ________ ________ ________

e. Paid cash for rent on building. ________ ________ ________

f. Collected on account receivable in full. ________ ________ ________

g. Paid cash for supplies. ________ ________ ________

h. Returned supplies purchased on account. ________ ________ ________

i. Paid cash to settle accounts. ________ ________ ________

j. Paid cash to owner for personal use. ________ ________ ________

Effects of Transaction
The following transactions were completed by Elizabeth Salvador Freight Services during November 2020.

________ a. Cash received from delivery services, P92,700.

________ b. Paid creditors on account, P20,000.

________ c. Received cash from owner as additional investment, P600,000.

________ d. Paid advertising expense, P5,000.

________ e. Billed customers for delivery services on account, P55,200.

________ f. Purchased supplies for cash, P6,000.

________ g. Paid rent for the month, P20,000.

________ h. Received cash from customers on account, P25,440.


i. Determined that the cost of supplies on hand was P1,440 so P4,560 of supplies were
________
used during the month.
________ j. Owner withdrew cash for personal use, P20,000.

Indicate the effects of each transaction on the space provided:

A. Increase an asset, decrease another asset.


B. Increase an asset, increase a liability.
C. Increase an asset, increase in owner’s equity.
D. Decrease an asset, decrease a liability.
E. Decrease an asset, decrease in owner’s equity.

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