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
|
ASSETS |
= |
LIABILITIES |
+ |
SHAREHOLDERS’ EQUITY |
|
|
1. |
(+) |
(+) |
|||
|
2. |
(+) |
(+) |
|||
|
3. |
(+)(-) |
||||
|
4. |
(-) |
(-) |
|||
|
5. |
(-) |
(-) |
|||
|
6. |
(+) |
(-) |
|||
|
7. |
(-) |
(+) |
|||
|
8. |
(+)(-) |
||||
|
9. |
(+)(-) |
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
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