Accounting 1

The effect of purchase an assets by cash in the accounting equation

• Increase in Account payable

• Increase in capital

• Increase in cash

• Decrease in cash

I am part of current asset I mean the stock the company have to sale it to the customers

If the company perform services on credit then,

• Dr. Revenue

  Cr. Cash

• Dr. Cash

  Cr.Account payable

• Dr. Account receivables

  Cr. Revenue

If the company paid rent, which account will be in credit

The second step in the accounting cycle

• Make journal entries

• Ledger account

• Trial balance

• Financial statements

Which of the following consider as non current assets ( you can choose more than one)

• Car

• Land

• Furniture

• Supplies

Started business with cash will have effect:

• Decrease cash and capital

• Increase cash and capital

• Increase cash and drawings

• Decrease cash and account receivable

Which of the following is non current liability

• Land

• Building

• Bank loan

• Bank overdraft

Withdraw cash for personal use, we put in debit side

Main accounting equation =

• Asset=liability-owner equity

• Assets=liability+owner equity

• Assets=liability+capital

• Liability=assets+capital