Based on the series of activities below, classify and record the following financial information in the table provided:

ECO commenced business on 1 July. A summary of transactions for the month of July are set out below:

1. Owner injects capital of $20,000 to ECO on 1 July.
2. ECO purchases a computer with cash for $5,500 (including GST) on 1 July.
3. ECO purchases materials on 15 July for $11,000 (including GST). The materials are not paid for until August (the following month).
4. ECO issues a customer progress invoice for $27,500 (including GST) on 31 July. The customer does not pay until August (the following month).
5. ECO pays $1,100 (including GST) to Google advertising with cash on 15 July.

Follow through the above transactions. As at 31 July, Identify:

• Assets
• Liabilities
• Capital
• Revenue
• Direct Costs (i.e. materials and labour)
• Overhead Expenses

b)  What is the assumption being made regarding the method of accounting used for ECO in the table 

 

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a Based on the series of activities provided we can classify and record the financial informati... View the full answer