Show the effect of each transaction on the basic accounting equation, A = 0 + L;...

  

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Show the effect of each transaction on the basic accounting equation, A = 0 + L; example, the owner invested R5 000 cash, as capital in the business. No. e.g. A = +R5 000 + +R5 000 O 4.1 Paid SI Insurance Company, R 2 300 by EFT for building insurance. 4.2 Invested R50 000 in a fixed deposit with Big Bank for one year at 8% interest. 4.3 Bought a new motor vehicle on credit from Motor Dealers, R380 000. 4.4 Issued a cheque to the Municipality, R745 for water and electricity. 4.5 A debtor whose account was previously written off, paid R500 cash. 4.6 Issued a cheque to a creditor in part payment of his account, R1 420. 4.7 The owner, transferred R6 000 from the business bank account to his personal account. Show the effect of each transaction on the basic accounting equation, A = 0 + L; example, the owner invested R5 000 cash, as capital in the business. No. e.g. A = +R5 000 + +R5 000 O 4.1 Paid SI Insurance Company, R 2 300 by EFT for building insurance. 4.2 Invested R50 000 in a fixed deposit with Big Bank for one year at 8% interest. 4.3 Bought a new motor vehicle on credit from Motor Dealers, R380 000. 4.4 Issued a cheque to the Municipality, R745 for water and electricity. 4.5 A debtor whose account was previously written off, paid R500 cash. 4.6 Issued a cheque to a creditor in part payment of his account, R1 420. 4.7 The owner, transferred R6 000 from the business bank account to his personal account.

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SOLUTION Here are the effects of each transaction on the basic accounting equation A O L 1 Initial investment by the owner A O L R5000 R0 R5000 2 Paym... View the full answer