Assume John Sullivan completed the following additional transactions during February.

(e) Received cash from a client for professional services, $1,500.

(f) Paid office rent for February, $600.

(g) Paid February phone bill, $64.

(h) Withdrew cash for personal use, $1,000.

(i) Performed services for clients on account, $750.

Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets = Liabilities + Owner's Equity (Capital - Drawing Revenues - Expenses).

Question

Business

Isla Collins

11 February, 23:01

Assume John Sullivan completed the following additional transactions during February.

(e) Received cash from a client for professional services, $1,500.

(f) Paid office rent for February, $600.

(g) Paid February phone bill, $64.

(h) Withdrew cash for personal use, $1,000.

(i) Performed services for clients on account, $750.

Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets = Liabilities + Owner's Equity (Capital - Drawing Revenues - Expenses).

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Answers (1)

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Karsyn Phillips · Answer 1

(e) assets (cash) increase by 1,500

Owner's Equity/Revenues (fees earned) increase by 1,500

(f) Owner's Equity/Expense (rent expense) increase by 750

Assets (cash) decrease by 750

(g) Owner's Equity/Expense (utilities expense) increase by 64

Assets (cash) decrease by 64

(i) Assets (Account Receivable) increase by 1,500

Owner's Equity/Revenues (fees earned) increase by 750

Explanation:

Each transaction should at least be compose by 2 accounts, and it will need to be balance,

We must understand that while expenses decrease the equity the amount of expenses is, increasing when an expense is recognized.