基础会计学英文版Lesson03-enAnalyzing and Recording Transactions.ppt

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Transactions, Accounts and Rules of Debits Credits (cont) Payment on account decreases both assets and liabilities. Personal transactions of the owner do not affect the business, per the entity concept. Collection of cash on account increases assets and decreases assets. Sale of an asset at a price equal to its cost increases assets and decreases assets. Declaration and payment of cash dividends decreases both assets and stockholders’ equity. * An Practical Illustration Do you still remember the example of Beauty Photo Store? We are using it again here! Remember always:The accounting equation must remain in balance after each transaction has been recorded. * An Practical Illustration (cont) Wang Fang invests $30,000 cash to start her business of Beauty Photo Store.The accounts involved are:(1)Cash (asset) (2)Owner’s Equity (equity) * An Practical Illustration (cont) * Wang Fang invests $30,000 cash to start her business. An Practical Illustration (cont) Purchased supplies paying $2,500 cash.  The accounts involved are: (1) Cash (asset) (2) Supplies (asset) * An Practical Illustration (cont) Purchased supplies paying $2,500 cash. * An Practical Illustration (cont) Purchased camera and producing equipment for the store for $20,000 cash. The accounts involved are: (1) Cash (asset) (2) equipment (asset) * An Practical Illustration (cont) Purchased equipment for the store for $20,000 cash. * An Practical Illustration (cont) Purchased supplies of $1,100 on account and equipment of $6,000 by signing a note. The accounts involved are: (1) Supplies (asset) (2) Equipment (asset) (3) Accounts payable (liability) (4) Notes payable (liability) * An Practical Illustration (cont) Purchased supplies of $1,100 on account and equipment of $6,000 by signing a note. * An Practical Illustration (cont) Now let’s look at transactions involvingrevenues and expenses. * An Practical Illust