POA Chapter 3 Effects on accounting equation revision

Owner deposited $8,000 into business bank account to start his business.

• Owner's equity (Capital) - $8,000

  Assets (Cash at bank) -$8000

• Owner's equity (Capital) + $8,000

  Assets (Cash at bank) +$8000

• Owner's equity (Drawings) + $8,000

  Assets (Cash at bank) - $8000

• Owner's equity (Drawings) - $8,000

  Assets (Cash at bank) +$8000

Business bought a delivery truck for $25,000 on credit from Bee Motors.

• Assets (Motor Vehicles) +25,000

  Liabilities (Trade Payables) +25,000

• Assets (Motor Vehicles) +25,000

  Liabilities (Trade Payables) -25,000

• Assets (Motor Vehicles) +25,000

  Liabilities (Trade Payables - Bee Motors) -25,000

• Assets (Motor Vehicles) +25,000

  Liabilities (Trade Payables - Bee Motors) +25,000

Owner took $300 cash from his business to purchase an item for his own home.

• Assets (Cash at bank) -$300

  Owner's equity (Capital) -$300

• Assets (Cash at bank) -$300

  Owner's equity (Drawing) -$300

• Assets (Cash at bank) -$300

  Owner's equity (Capital) +$300

• Assets (Cash at bank) -$300

  Owner's equity (Drawing) +$300

Owner purchased computers for $5,000 with $4000 on credit and $1000 cash.

• Assets (Office equipment) +$5,000

  Assets (Cash in hand) -$1,000

  Liabilities (Trade Receivables) -$4,000

• Assets (Office equipment) +$5,000

  Assets (Cash at bank) -$1,000

  Liabilities (Trade Payables) +$4,000

• Assets (Office equipment) +$5,000

  Assets (Cash in hand) -$1,000

  Liabilities (Trade Payables) +$4,000

• Assets (Office equipment) +$5,000

  Assets (Cash at bank) +$1,000

  Liabilities (Trade Payables) +$4,000

Business paid $1,000 as salaries to staff. How will this affect Owner's Equity?

• Salaries expense increases by $1,000, Owner's equity decreases by $1,000

• Salaries expense increases by $1,000, Owner's equity increases by $1,000

• Salaries expense decreases by $1,000, Owner's equity decreases by $1,000

• Salaries expense decreases by $1,000, Owner's equity increases by $1,000

Owner withdrew $100 cash from business bank account for office use.

• Cash at bank +100 | Cash in hand -100

• Cash at bank -100 | Cash in hand +100

• Cash at bank -100 | Drawings -100

Sold $120 worth of goods and received cheque.

• Cash at bank -120 | Sales revenue -120

• Cash in hand +120|Sales revenue +120

• Cash at bank +120 | Sales revenue +120

• Inventory -120|Cost of sales -120

Goods costing $80 was sold.

• Cash at bank -80| Sales revenue -80

• Cash in hand +80|Sales revenue +80

• Inventory +80|Cost of sales +80

• Inventory -80|Cost of sales -80