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.

Answer 1

Question Completion:

The impact on accounting equation:

Answer:

Assets = Liabilities + Equity

a. Cash +$6,200 = Liabilities + Retained Earnings + $6,200

b. Accounts Receivable +$4,700 = Liabilities + Retained Earnings + $4,700

c. Cash -$1,750 = Liabilities + Retained Earnings -$1,750

d. Cash + $2,350; Accounts Receivable -$2,350 = Liabilities + Equity

e. Cash - $840 = Liabilities + Retained Earnings -$840

Step-by-step explanation:

The accounting equation states that Assets = Liabilities + Equity. This equation means that every business transaction has effect on either side or both sides of the equation. For every transaction, the Assets are increased or decreased and Liabilities + Equity are increased or decreased. And sometimes, only one side is affected by a transaction. This means that the affected side is increased and decreased by one transaction. Case "d" is typical example.