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S4 BAFS Chapter 2 (The double entry)
Worksheet – Question 1
1. The owner introduced capital
H Chan started a business with $8,000 cash and a bank deposit of $5,000.
2. Bought an asset by cash
The firm bought furniture for $4,000 by cash.
3. Withdrawal of money from bank
The firm withdraw $2,000 cash from its bank account.
4. Borrowed money from bank
The firm borrowed $20,000 from a bank.
5. Loan repayment to bank
The firm repaid $5,000 of bank loan.
Effects of transactions on the accounting equation
Assets
=
Liabilities
=
+
Capital
+
Question 2
1. The owner, Jack, invested $200,000 cash to set up a business on 1
May 20X6.
2. On 2 May 20X6, Jack provided a motor van, which cost $80,000, to the
business.
3. On 4 May 20X6, Jack Company purchased office equipment using
$25,000 cash.
4. On 10 May 20X6, Jack Company borrowed a bank loan of $15,000.
5. On 15 May 20X6, Jack Company sold a piece of office equipment for
$10,000 to Cindy Company on credit.
6. On 20 May 20X6, Jack Company purchased furniture for $8,000 from
Lindy Company on credit.
7. On 29 May 20X6, the business received an interest of $2,000 from its
bank deposit.
8. On 29 May 20X6, Jack Company paid a rental expense of $7,000 by
cheque.
Effects of transactions on the accounting equation
Assets
=
=
Liabilities
+
+
Capital
+
(Revenue
+ (
-
Expenses)
-
)
Question 3
1.
2.
3.
4.
5.
6.
7.
8.
H Chan started a business with $5,000 cash and a bank deposit of
$8,000.
The firm bought furniture for $4,000 by cheque.
The firm bought a machine for $2,000 from J Wu on credit.
The firm paid its creditor, J Wu, $1,000 in cash.
The firm borrowed $20,000 from a bank.
The firm sold a piece of furniture to D Wai at its original cost
of $100.
The firm paid an electricity charges of $3,000 in cash.
The firm received rental of $10,000 by cheque.
Effects of transactions on the accounting equation
Assets
=
=
Liabilities
+
+
Capital
+
(Revenue
+ (
-
Expenses)
-
)