Accounting and Finance Foundations

Unit 5

Accounting and Finance Foundations Unit 5: Accounting Terminology 356

Accounting Terminology

Chapter 14

Transaction 8

Sold Services on account to Lisa Cook, $1,000

When we look at the three questions discussed earlier, we see

a. The two accounts affected are Revenue and Accounts Receivable, Lisa Cook.

b. Accounts Receivable, Lisa Cook is an asset and Revenue affects Owner’s Equity.

c. Accounts Receivable increases.

Revenue increases.

Assets = Liabilities + Owner’s Equity

Trans.
No.

Cash + Supplies + Accounts

Receivable,

Lisa Cook

+ Prepaid

Insurance

= Accounts

Payable/

Office

Supply

+ Your

Name,

Capital

+ Revenue - 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 -

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