Global Entity is a retailer situated in Windhoek that sells various products. On 12 December 2021, Global Entity ordered trade inventories for an invoice price of N$40 000. The inventories were delivered on 20 December 2021 and the amount was settled on the same day. Global Entity makes use of the perpetual inventory system. Show the effect of each transaction on the Accounting Equation. Use the equation: A= OE + L a. Asset; +40 000 = Equity; nil + Liability; nil. Asset; -40 000 b. Asset; +40 000 = Equity; nil + Liability; nil. Asset; +40 000 c. Asset; -40 000 = Equity; -40 000 + Liability; nil d. Asset; +40 000 = Equity; nil + Liability; +40 000 e.
1. Global Entity is a retailer situated in Windhoek that sells various products. On 12 December 2021, Global Entity ordered trade inventories for an invoice price of N$40 000. The inventories were delivered on 20 December 2021 and the amount was settled on the same day. Global Entity makes use of the perpetual inventory system. Show the effect of each transaction on the
Asset; +40 000 = Equity; nil + Liability; nil.
Asset; -40 000
Asset; +40 000 = Equity; nil + Liability; nil.
Asset; +40 000
Asset; -40 000 = Equity; -40 000 + Liability; nil
Asset; +40 000 = Equity; nil + Liability; +40 000
Asset; nil = Equity; -40 000 + Liability; +40 000
2.
Global Entity is a retailer situated in Windhoek that sells various products. For the month of March 2022, the water and electricity account due to the local municipality was recorded to amount to N$8 000. Included in the N$8 000 was Mr G, the owner’s personal water and electricity of N$2 000. Show the effect of the transaction on the Accounting Equation. Use the equation: A= OE + L
Asset; -6 000 = Equity; -6 000 + Liability; nil
Asset; -6 000 = Equity; -8 000 + Liability; +2 000
Asset; nil = Equity; -6 000 + Liability; +6 000
Asset; -2 000 = Equity; -2 000 + Liability; nil
Asset; nil = Equity; -6 000 + Liability; +6 000
Asset; nil = Equity; -8 000 + Liability; +8 000
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