Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615



Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem

Effect of transactions on accounting equation

Describe how the following business transactions affect the three elements of the accounting equation:

a.    Invested cash in business.

b.    Paid for utilities used in the business.

c.    Purchased supplies for cash.

d.    Purchased supplies on account.

e.    Received cash for services performed.

To determine

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a company and claims of resources to creditors and owners. Accounting equation is expressed as shown below:

Assets = Liabilities + Owners' EquityAssets = Liabilities+{(Owners' investments)+(Owners' withdrawals)+((Revenues)(Expenses))}

To analyze: Business transactions by indicating their effects on accounting equation


  1. a.  Cash invested in business: As the cash is received, assets increase; cash is being invested in the business, owner's equity increase.
  2. b. Paid for utilities used in business: As the cash is paid, assets decrease; payment of utilities is an expense, hence the owner's equity decrease.
  3. c...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Explain how an increase in the price level affects the real value of money.

Principles of Macroeconomics (MindTap Course List)

For what three reasons is product cost information needed by a manufacturing business?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

If a firm goes from zero debt to successively higher levels of debt, why would you expect its stock price to ri...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)