Question

The following transactions were completed by the company.

a. The company completed consulting work for a client and immediately collected $6,200 cash earned.
b. The company completed commission work for a client and sent a bill for $4,700 to be received within 30 days.
c. The company paid an assistant $1,750 cash as wages for the period.
d. The company collected $2,350 cash as a partial payment for the amount owed by the client in transaction b.
e. The company paid $840 cash for this period's cleaning services.
Required
Record the impact of each transaction on individual items of the accounting equation. (Record decreases to account balances with a minus sign.)
Assets = Liabilities + Stockholders' Equity
Cash + Accounts Receivable = Accounts Payable + Common Stock - Dividends + Revenues - Expenses
A.
B.
Bal
C.
Bal
D.
Bal
E.
Bal

Answer 1

Assets = Liabilities + Stockholders' Equity

Cash + Accounts Receivable = Accounts Payable + Common Stock - Dividends + Revenues - Expenses

A. Cash $6,200 + Accounts Receivable = Accounts Payable + Common Stock - Dividends + Revenues $6,200 - Expenses

B. Cash $6,200 + Accounts Receivable $4,700 = Accounts Payable + Common Stock - Dividends + Revenues $6,200 + $4,700 - Expenses

Bal Cash $6,200 + Accounts Receivable $4,700 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses

C. Bal Cash $6,200 -$1,750 + Accounts Receivable $4,700 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $1,750

Bal Cash $4,450 + Accounts Receivable $4,700 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $1,750

D. Bal Cash $4,450 + $2,350 + Accounts Receivable $4,700 - $2,350 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $1,750

Bal Cash $6,800 + Accounts Receivable $2,350 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $1,750

E. Bal Cash $6,800 - $840 + Accounts Receivable $2,350 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $1,750 + $840

Bal Cash $5,960 + Accounts Receivable $2,350 = Accounts Payable + Common Stock - Dividends + Revenues $10,900 - Expenses $2,590

Step-by-step explanation:

Assets = Liabilities + Stockholders' Equity

The company's accounting equation shows that with each business transaction, the equation is always in balance, provided the double entry system of accounting is maintained. This system specifies that more than one account is involved in each transaction. These accounts involve the debiting or crediting of one or two sides of the accounting equation.