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ACT 2112

SOLUTION FOR TUTORIAL 2


1. Name the three elements of the accounting equation.
3 elements of the accounting equation usually show the relationship between assets,
liabilities, and owners equity of a business at the certain date.
2. Debits and credits is amounts entered on the left side of an account, regardless of the
account title, are called debits to the account. Amount entered on the right side of an
account are called credits and the account is said to be credited. Debit and credits used
record accounting transaction first, each account has a title, which is the name of the item
recorded in the account. Second, each account has a space for recording increases in the
amount item. Third, each account has a space for recording decrease in the amount of the
item.
3. Tick () the relevant category provided in the box for each of the item listed below.
Item

a) Land
b) Service
revenue
c) Salaries &
Wages
expenses
d) Supplies
e) Cash
f) Utilities
expenses
g) Equipment
h) Accounts
payable
i) Rent on
office and
equipment
j) Accounts
receivable
k) Sales
l) Advertising
expenses
m) Depreciation

Assets
Fixed Current
assets assets

Liability
Owners equity
LongCurrent Capital Profit and Drawings
term
liabilities
Loss
liabilities
(RevenuesExpenses)

expenses
n) Custom duty
o) Premises
p) Long-term
loan

q) Drawings

3. Mark started a delivery service, Mark deliveries, on June 1. The accounting transactions in
the table below occurred during the month of June. Indicate the proper accounts to be
debited and credited for the following transactions.
June

Transactions

Mark invested RM10,000 cash in the


business.
Purchased a used van for deliveries for
RM12,000. Mark paid RM2,000 cash and
signed a loan for the remaining balance.
Paid RM500 for office rent for the month.
Performed RM4,400 of services on
account.
Paid RM200 cash for repairing a van.
Purchased supplies for RM150 on
account.
Received a cash payment of RM1,250 for
services provided on 5th June.
Purchased gasoline for RM100 on
account.

2
3
5
9
12
15
17
20
23
26
29
30

Received a cash payment of RM1,500 for


services provided.
Made a cash payment of RM500 on the
loan obtained on 2nd June.
Paid RM250 for utilities.
Paid for the gasoline purchased on
account on 17th June.
Paid RM1,000 for employee salaries.

Account (s) to
be debited
Cash

Account (s) to
be credited
Capital

Van/Vehicle

Cash
Loan

Rental expense
Accounts
Receivable
Repair expense
Supplies

Cash
Service revenue

Loan

Cash

Cash
Accounts
payable
Cash
Accounts
receivable
Gasoline expense Accrued gasoline
expense/Gasoline
payable
Cash
Service revenue

Utility expense
Cash
Accrued gasoline Cash
expense/Gasoline
payable
Salary expense
Cash

4. Lina started a consulting firm, Lina Consulting, on May 1, 2010. The following transactions
occurred during the month of May.
May Transactions
1
Lina invested RM8,000 cash in the business.
2
Paid RM800 for office rent for the month.
2

3
5
9
12
15
17
20
23
26
29
30

Purchased RM500 of supplies on account.


Paid RM50 to advertise in the Malaysia Today newspaper.
Received RM3,000 cash for services provided.
Paid a RM700 cash for office renovation.
Performed RM5,300 of services on account.
Paid RM3,000 for employees salaries.
Paid for the supplies purchased on account on 3rd May.
Received a cash payment of RM3,000 for services provided on account on 5th May.
Borrowed RM5,000 long-term loan from CIBB.
Purchased office equipment for RM2,800 on account.
Paid RM150 for utilities.

Show the effects of the above transactions pm the accounting equation:


ASSETS = LIABILTIES + OWNERS EQUITY
Note: Answer the question in a Table form shown below.
Owners
Equity
Date
LongRevenue
Accounts
Office
Accounts
Cash
Supplies
= term
receivable
equipment
payable
loan
(expenses)
1
8000
8000
2
(800)
(800)
3
500
500
5
(50)
(50)
9
3000
3000
12
(700)
(700)
15
5300
5300
17
(3000)
(3000)
20
(500)
(500)
23
3000
(3000)
26
5000
5000
29
2800
2800
(notes
payable)
30
(150)
(150)
13800 2300
500
2800
5000 2800
11600
19400
19400
Assets

Liabilities

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