Unit 5
Accounting and Finance Foundations Unit 5: Accounting Terminology 336
Accounting Terminology
Chapter 14
Assets = Liabilities + Owner’s Equity
Trans.
No.
Cash + Supplies + Accounts
Receivable,
Lisa Cook
+ Prepaid
Insurance
= Accounts
Payable
Office
Supply
+ Your
Name,
Capital
+ Rev. - Expenses - Drawing
- 7500 + + + = + 7500 + - -
- -300
7200
+ +300 + + = + 7500 + - -
- -550
6650
+ 300 + + +550 = + 7500 + - -
- 6650 + +450
750
+ + 550 = +450 + 7500 + - -
- -200
6450
+ 750 + + 550 = -200
250
+ 7500 + - -
- +1200
7650
+ 750 + + 550 = 250 + 7500 + +1200 - -
Transaction 6
Received cash from sales, $1,200
When cash is received for sales, the Cash and Revenue accounts are affected. Cash is classified as an as-
set, and Sales is classified as a revenue account. When cash is received, the amount of cash increases so
you debit Cash. The amount of sales also increases, which is a Revenue credit.
Student Guide