Accounting and Finance Foundations

Unit 5

Accounting and Finance Foundations Unit 5: Accounting Terminology 360

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

+ 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 -

9. +750
   7600

+ 750 + -750

250

+ 550 = 250 + 7500 + 2200 - 800 -

10. -900
    6700

+ 750 + 250 + 550 = 250 + 7500 + 2200 - 800 - 900

900

Transaction 10

Paid cash to the owner for personal use, $900

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

a. The two accounts affected are Cash and Your Name, Drawing.

b. Cash is an asset and Your Name, Drawing is a drawing account that affects Owner’s Equity.

c. Cash decreases.

Your Name, Drawing increases.

Student Guide