Question

Analyze the transactions of a business organized as a proprietorship described below and indicate whether the transaction increased, decreased or increased and decreased the accounting equation.

Answer 1

An accounting transaction is a business activity or event that causes a measurable change in the accounting equation is described below.

Explanation:

• Owner's Equity Assets Liabilities Decreased Increased
• Received cash for services rendered Increase Decreased -
• Purchased office equipment on credit Increased Decreased
• Paid employees salaries. Decreased increased Received cash from customer in payment on account Decreased d
• Paid telephone bill for the month. Decreased
• Paid for office equipment purchased in transaction  Decreased
• Purchased office supplies on credit. Increased and decreased Decreased Increased
• Owner withdrew cash for personal expenses Decreased Increased
• Obtained a loan from the bank Increased
• Purchased office equipment on credit ed increased Decreased
• Paid employees salaries Received cash from customer in payment on account.
• Paid for office equipment purchased in transaction 2 Decreases
• Purchased office supplies on credit. Decreased
• Owner withdrew cash for personal expenses. creased increased
• Obtained a loan from the bank Increased
• Billed customers for services rendered. Increased Increased