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Accounting Essay

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Below is an essay on "Accounting" from Anti Essays, your source for research papers, essays, and term paper examples.

The Accounting Equation:
ASSETS = LIABILITIES + OWNER’S EQUITY

In analyzing the effects of business transactions, the accounting equation must always be balanced. The analysis involves the assets, liabilities and owner’s equity in the business.

Sample transactions:

March 1 May Gomez opened Happy Tour and Travel Service by contributing cash of P50,000. She has three cars worth P1,200,000 but contributed only two cars worth P750,000.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Cash     50,000 |   | Gomez, Capital     800,000 |
Cars     750,000 |   |   |

March 3 Gomez borrowed P100,000 cash from PNB for use in her business.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Cash     100,000 |  Loans Payable     100,000 | |

March 7 Bought tables and chairs from Blim’s and paid cash, P45,000.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Cash     (45,000) |   | |
Furnitures & Fixtures 45,000 | | |

March 15 Various equipment were purchased on account from National Winners for P55,000.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Equipment     55,000 |  Accounts Payable     55,000 | |

March 18 Gomez made cash withdrawal of P5,000 from personal use.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Cash     (5,000) |   | Gomez, Drawing (5,000) |

March 20 The account due to National Winners was paid in cash.
ASSETS | LIABILITIES | OWNER'S EQUITY |
Cash     (55,000) |  Accounts Payable   (55,000) | |

The summary of the effects of the transactions follows:

DATE |   ASSETS |   LIABILITIES |   OWNER'S EQUITY |
|   Cash |   Cars |   Equipment |   Furniture |   Loans Payable |   Accounts Payable |   Gomez, Capital |   Gomez, Drawing |
1-Mar | 50,000 | 750,000 | | | | | 800,000 | |
3-Mar | 100,000 | | | | 100,000 | | | |
Balances | 150,000 | 750,000 | | | 100,000 | | 800,000 | |
7-Mar | (45,000) | | | 45,000 | | | | |
Balances | 105,000 | 750,000 | | 45,000 | 100,000 | | 800,000 | |
15-Mar | | | 55,000 | |...

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MLA Citation

"Accounting". Anti Essays. 23 Feb. 2019

<https://www.antiessays.com/free-essays/Accounting-411122.html>

APA Citation

Accounting. Anti Essays. Retrieved February 23, 2019, from the World Wide Web: https://www.antiessays.com/free-essays/Accounting-411122.html