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  • Chap 3 Summary Notes EFFECTS

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    1. The document outlines 19 common business transactions and their accounting effects and journal entries. It shows whether each transaction increases or decreases assets, expenses, liabilities, owner's equity, revenue, and the related debit and credit accounts. 2. Common transactions include purchasing or selling goods for cash/credit, receiving or returning goods from suppliers/customers, paying or receiving expenses/income, obtaining loans, and owner contributions and withdrawals. 3. For each transaction, the accounting effects are indicated as increasing or decreasing specific accounts, and model journal entries are provided with debit and credit account names.

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    1. The document outlines 19 common business transactions and their accounting effects and journal entries. It shows whether each transaction increases or decreases assets, expenses, liabilities, owner's equity, revenue, and the related debit and credit accounts. 2. Common transactions include purchasing or selling goods for cash/credit, receiving or returning goods from suppliers/customers, paying or receiving expenses/income, obtaining loans, and owner contributions and withdrawals. 3. For each transaction, the accounting effects are indicated as increasing or decreasing specific accounts, and model journal entries are provided with debit and credit account names.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    7 views3 pages

    Chap 3 Summary Notes EFFECTS

    Uploaded by

    nabkill
    1. The document outlines 19 common business transactions and their accounting effects and journal entries. It shows whether each transaction increases or decreases assets, expenses, liabilities, owner's equity, revenue, and the related debit and credit accounts. 2. Common transactions include purchasing or selling goods for cash/credit, receiving or returning goods from suppliers/customers, paying or receiving expenses/income, obtaining loans, and owner contributions and withdrawals. 3. For each transaction, the accounting effects are indicated as increasing or decreasing specific accounts, and model journal entries are provided with debit and credit account names.

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    © All Rights Reserved
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    of 3

    NOTES - ACCOUNTING CLASSIFICATION (EFFECTS)

    EFFECTS JOURNAL ENTRIES


    NO. TRANSACTIONS INCREASE DECREASE DEBIT (RM) CREDIT (RM)
    1 Started the business with cash/bank Asset Cash/bank
    Capital
    Owner Equity
    Brought cash into the business bank
    Asset Furniture
    2 Brought in assets into the business (example: furniture, vehicles)
    Owner equity Capital

    Expenses Purchase
    3 Purchased goods on credit from Izz Ent (Creditor/Account payables) Creditor
    Liabilities
    (Izz Ent)
    Expenses Purchase
    4 Purchased goods by cash/cheque
    Asset Cash/Bank
    Liabilities Creditor
    (Ant Ent)
    5 Business return goods to suppliers/creditors (example: Ant Ent)
    Expenses Purchase
    return
    Asset Debtor
    6 Sold goods on credit to Laily (Debtors/Account receivables) (Laily)
    Revenue Sales
    Asset Cash/bank
    7 Sold goods by cash /cheque
    Revenue Sales
    Revenue Sales return
    8 Debtors (Laily) returned goods to the business Asset Debtor
    (Laily)
    Asset Motor/van/
    9 Purchase assets (example : motor, furniture, van, computer,
    furniture/
    etc) by cash/cheque
    computer/etc

    Asset Cash/bank
    Motor/
    10 Purchase assets (example : motor, furniture, van, computer, Asset furniture/
    etc) on credit from AA Comp van/
    computer/etc
    Liabilities Creditor (AA Comp)
    Expenses Salary/ rental
    paid/
    Paid expenses (example : salary, rental paid, stationery,
    11 stationery/
    utilities,etc) by cash/cheque
    utilities/etc
    Asset Cash/bank
    Asset Cash/bank
    12 Received (example: rental, commission, etc) by cash/cheque
    Revenue Rental rec/
    commission rec / etc
    Owner equity Drawing
    13 Owner took @ withdraw goods from the company for
    Expenses Purchase
    personal/private use
    Owner equity Drawing
    14 Owner took @ withdraw cash/bank from the company for
    Asset Cash/bank
    personal/private use
    Asset Bank
    15 Obtained loan from the AAA Bank
    Liabilities Loan
    Asset Bank
    16 Cash from the business transferred to business bank account
    Asset Cash
    Liability Creditors
    17 Discount received from creditors/suppliers Revenue Discount received
    Expenses Discount
    18 Discount given to debtors/customers allowed
    Asset Debtors
    Carriage inwards – bring in inventory/goods into the business Expenses Carriage
    19 Carriage outwards – sent inventory/goods to the customer inwards/
    Carriage
    outwards
    Asset Cash/Bank

    (Dr) (Cr)

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