Accounting and Finance Foundations

Unit 5

Accounting and Finance Foundations Unit 5: Accounting Terminology 339

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

1. 7500 + + + = + 7500 + - -


2. -300
   7200

+ +300 + + = + 7500 + - -

3. -550
   6650

+ 300 + + +550 = + 7500 + - -

4. 6650 + +450
   750

+ + 550 = +450 + 7500 + - -

5. -200
   6450

+ 750 + + 550 = -200

250

+ 7500 + - -

6. +1200
   7650

+ 750 + + 550 = 250 + 7500 + 1200 - -

7. -800
   6850

+ 750 + + 550 = 250 + 7500 + 1200 - 800 -

8. 6850 + 750 + + 1000
   1000

+ 550 = 250 + 7500 + +1000

2200

• 800 -

9. +750
   7600

+ 750 + -750

250

+ 550 = 250 + 7500 + 2200 - 800 -

Transaction 9

Received Cash from Lisa Cook on Account, $750

When Cash is received from a person who owes us money, the two accounts affected are Cash and

Accounts Receivable, Lisa Cook. Cash is classified as an asset. Anytime we received cash we increase

the cash account. Accounts Receivable is also classified as an asset. Anytime someone pays us what

they owe us, accounts receivable decreases because we have received the money.

Student Guide