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Accounting 205 Phase 3 IP

Accounting 205 Phase 3 IP. Accounting Equation. Assets = Owner’s Equity +Outsider’s Liabilities. First Transaction. 1. Sept. 1 Signed up for home inspection course at local community college. Cost is $1,000. Put this on the business credit card.

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Accounting 205 Phase 3 IP

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  1. Accounting 205Phase 3 IP

  2. Accounting Equation Assets = Owner’s Equity +Outsider’s Liabilities

  3. First Transaction 1. Sept. 1 Signed up for home inspection course at local community college. Cost is $1,000. Put this on the business credit card. Equation: Liability -$1000 (Credit card payable) Owner’s Equity:-$1000 (Expense)

  4. Second Transaction 2. Sept. 20 Transferred $2,500 from personal savings account to business checking account. Equation: Assets: +$2500 (Cash) Owner’s Equity: +$2500

  5. Third Transaction 3. Sept. 25 Purchased reference materials from local book store. Paid $250 cash. Equation: Assets: -$250 (Cash) Assets:+$250 (Books)

  6. Fourth Transaction 4. Sept. 25 Signed up for home inspection licensing exam. Placed the $400 fee on the business credit card. Equation: Liability : $400 (Credit card payable) Owner’s Equity:-$400 (Expenses)

  7. Fifth Transaction 5. Oct. 15 Purchased a 1 year insurance policy for the business by putting the $2,400 premium on the business credit card. Equation: Assets: -$2400 (Credit Card Payable) Assets:+$2400 (Prepaid Insurance)

  8. Sixth Transaction 6. Oct. 20 Paid $250 on the business credit card. Equation: Assets: -$250 (Cash) Owner’s Equity:-$250 (Credit card payable)

  9. Seventh Transaction 7. Oct. 25 Purchased tools for the business by paying $500 cash. Equation: Assets: -$500 (Cash) Owner’s Equity:-$500 (Expenses)

  10. Eighth Transaction 8. Oct. 30 Paid $200 to get business cards printed. (Note: this an advertising expense) Equation: Assets: -$200 (Cash) Owner’s Equity:-$200 (Expenses)

  11. Ninth Transaction 9. Nov. 1 Purchased candy baskets to leave at local realtors' offices to advertise business. Paid $100 cash. Equation: Assets: -$100 (Cash) Owner’s Equity:-$100 (Expenses)

  12. Tenth Transaction 10. Nov. 10 Purchased office supplies needed to prepare inspection reports. Paid $60 cash. Equation: Assets: -$60 (Cash) Owner’s Equity:-$60 (Expenses)

  13. Eleventh Transaction 11. Nov 20 Purchased truck costing $10,000 to use for business. Took out auto loan from local bank. Equation: Assets:+$10000 (Truck) Liabilities: +$10000 (Loan)

  14. References Wild,Larson & Chiappetta, (2007). Fundamental accounting principles 18th edition. Boston, MA: McGraw Hill Publishing.

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