Effects of Transactions on Accounting Equation (Part 2)

The business sold inventory and received $200 cheque. The cost of the dresses was $80.

• Sales revenue +$200

• Cash at bank +$200

• Cash in hand +$200

• Cost of sales +$80

• Inventory -$80

The business sold $1,500 worth of inventory on credit to a customer. The cost of the dresses was $500.

• Sales revenue +$1,500

• Trade receivable +$1,500

• Cost of sales +$500

• Inventory -$500

• Cash at bank +$1,500

A credit customer returned $300 worth of inventory of the wrong specification. The cost of the inventory was $130.

• Cost of Sales -$130

• Trade receivable -$300

• Sales return +$300

• Inventory +$130

• Sales revenue -$300

The business received a cheque of $1,200 from a credit customer for goods previously sold on credit.

• Cash in hand +$1,200

• Cash at bank +$1,200

• Trade receivable - $1,200

• Trade payable - $1,200

The business repaid $4,000 of the loan from URS Bank by cheque.

• Loan from URS Bank -$4,000

• Loan from URS Bank +$4,000

• Cash at bank -$4,000

• Cash at bank +$4,000

The business issued a cheque to pay utilities of $500

• Cash in hand -$500

• Cash at bank -$500

• Utilities expense -$500

• Utilities expense +$500