The following list covers many of the types of financial transactions. Notice that each transaction has an equal and offsetting effect on the accounting equation. Types of Accounting Transactions
Types of Accounting Transaction

Required: Using the appropriate accounting equation, study the following transactions and identify the effect of each on assets, liabilities and shareholders' equity, as applicable. Use a (+) to denote an increase and a (-) to denote a decrease, if any.
A = L + E
Example:
(+) (+) Issued share capital for cash
__ _ __Purchased a truck for cash
__ _ __Received a bank loan to pay for equipment
__ _ __Made a deposit for electricity service to be provided in the future
__ _ __Paid rent for the month just ended
__ _ __Signed a new union contract that provides for increased wages in the future
__ _ __Hired a messenger service to deliver letters during a mail strike
__ _ __Received a parcel; paid the delivery service
__ _ __Billed customers for services performed
__ _ __Made a cash payment to satisfy an outstanding obligation
__ _ __Received a payment of cash in satisfaction of an amount owed by a customer
__ _ __Collected cash from a customer for services rendered
__ _ __Paid cash for truck operating expenses (gas, oil, etc.)
__ _ __Made a monthly payment on the bank loan; this payment included a payment on part of the loan and also an amount of interest expense. (Hint: This transaction affects more than two parts of the accounting equation.)
__ _ __Issued shares in the company to pay off a loan
__ _ __Paid a dividend.

Transcribed Image Text:

SHAREHOLDERS' EQUITY ASSETS LIABILITIES 2. 3.