Week 1 - Accountancy

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  • Created by: jf00632
  • Created on: 09-01-19 15:00
What would be the effect if the owner invests 10,000 as capital in the business
Assets will increase by 10,000 and the business will receive cash and capital will increase
1 of 6
What is the effect: The owner purchases a motor van £6,000 on credit for use in the business.
Assets will increase by 6,000 and so will liabilites
2 of 6
What is the effect: Owner purchases equipment worth £4,000 to be used in the business for cash
Assets will increase by 4,000 since the business will gain equipment but the assets also decrease by 4,000 as the business has used cash to pay for it- therefore no change to the accounting equation
3 of 6
The owner purchases stock 9,000 half in cash and half on credit
1. Assets will increase by 9,000- gain stock 2. Assets will fall by 4,500 since the business will use cash. 3. liabilites increase by 4,500
4 of 6
What is the effect: Sells goods worth 3,000 for 5,000 in cash
1. Assets increase by 5,000 as the business gains cash 2. assets will decrease by 3,000 since it is sold off. Hence there is a net increase of 2,000 in assets (5,000 - 3,000) 3.Makes a profit of 2,000 4.Capital increases by 2,000
5 of 6
What is the effect: Raise a loan 28,000 from the bank, repayable in 3 years time
1. Assets increase by 28,000 LTL increase by 28,000
6 of 6

Other cards in this set

Card 2

Front

What is the effect: The owner purchases a motor van £6,000 on credit for use in the business.

Back

Assets will increase by 6,000 and so will liabilites

Card 3

Front

What is the effect: Owner purchases equipment worth £4,000 to be used in the business for cash

Back

Preview of the front of card 3

Card 4

Front

The owner purchases stock 9,000 half in cash and half on credit

Back

Preview of the front of card 4

Card 5

Front

What is the effect: Sells goods worth 3,000 for 5,000 in cash

Back

Preview of the front of card 5
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