Untitled Lesson

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LESSON
2-3 Analyzing How Transactions

Affect Owner’s Equity

Accounts

LO5Analyze transactions for operating a

business into debit and credit parts.

Learning Objectives

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Received Cash from Sales

January 10. Received cash from sales, $1,100.00.

Cash and Sales are affected.

1

2Cash is an asset.

Owner’s equity is increased.

3

Sales is credited.

4

Cash is
debited.

4

Sales is a
revenue
account
that affects
owner‘s
equity.

2

Assets are increased.

3

LO5

Lesson 2-3

SLIDE 2

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Sold Services on Account

January 12. Sold services on account to Main Street Services, $500.00.

Accounts Receivable—Main Street
Services and Sales are affected.

1

2
Accounts Receivable—
Main Street Services
is an asset.

Owner’s equity is
increased.

3

Sales is
credited.

4

Accounts
Receivable—
Main Street
Services is
debited.

4

Sales is a
revenue
account
that
affects
owner's
equity.

2

Assets are increased.

3

LO5

Lesson 2-3

SLIDE 3

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Paid Cash for an Expense

January 12. Paid cash for communications bill for
cell phone and Internet service, $80.00.

Communications Expense
and Cash are affected.

1

2
Cash is an asset.

Owner‘s equity is decreased;
expenses are increased.

3

Communications
Expense is debited.

4

Cash is
credited.

4

Communications
Expense is an
expense account
that affects
owner‘s equity.

2

Assets are
decreased.

3

LO5

Lesson 2-3

SLIDE 4

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Received Cash on Account

Assets

= Liabilities + Owner’s Equity

Cash and Accounts
Receivable—Main Street Services
are assets.

2

Assets (Accounts Receivable—Main
Street Services) are decreased.

3

Accounts
Receivable—Main
Street Services
is credited.

4

Cash is debited.

4

Assets (Cash) are increased.

3

Cash and Accounts Receivable—
Main Street Services are affected.

1

LO5

Lesson 2-3

SLIDE 5

January 16. Received cash on account from Main Street Services, $200.00.

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Paid Cash to Owner for Personal Use

January 16. Michael Delgado withdrew equity in the form of cash, $350.00.

Michael Delgado, Drawing and Cash are affected.

1

2Cash is an asset.

Owner’s equity is
decreased; withdrawals
are increased.

3

Michael Delgado,
Drawing is debited.

4

Cash is credited.

4

Assets are decreased.

3

Michael Delgado,
Drawing is an owner’s
equity account.

2

LO5

Lesson 2-3

SLIDE 6

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Lesson 2-3 Audit Your Understanding

1. What two accounts are affected when a business pays

cash for a cell phone bill?

ANSWER
Communications Expense
Cash

Lesson 2-3

SLIDE 7

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Lesson 2-3 Audit Your Understanding

2. What two accounts are affected when a business sells

services on account?

ANSWER
Accounts Receivable
Sales

Lesson 2-3

SLIDE 8

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Lesson 2-3 Audit Your Understanding

3. What two accounts are affected when a business receives

cash on account?

ANSWER
Cash
Accounts Receivable

Lesson 2-3

SLIDE 9

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Lesson 2-3 Audit Your Understanding

4. Is the drawing account increased on the debit side or

credit side?

ANSWER
Debit because withdrawals decrease owner’s equity

Lesson 2-3

SLIDE 10

Gilbertson, Century 21 Accounting General Journal, 11 Edition. © 2019 Cengage. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Lesson 2-3 Audit Your Understanding

5. Are revenue accounts increased on the debit side or

credit side?

ANSWER
Credit because revenue increases owner’s equity

Lesson 2-3

SLIDE 11