Chapter 1 Lecture.xlsx - On April 1 Vince Morelli established V Morelli Travel Agency The following transactions were completed during the month 1 2 3 4

Chapter 1 Lecture.xlsx - On April 1 Vince Morelli...

This preview shows page 1 - 2 out of 5 pages.

Rules: IF YOU INCREASE ONE SIDE OF THE EQUATION YOU MUST INCREASE THE OTHER SIDE YOU CAN INCREASE AND DECREASE ON THE SAME SIDE. THE EQUATION MUST ALWAYS BE IN BALANCE MEANING: ASSESTS= LIABILITIES + OWNERS EQUITY On April 1, Vince Morelli established V. Morelli Travel Agency. The following transactions were completed during the month. 1. Invested $15,000 cash to start the agency – Increase cash and increase capital. When you increase the owner’s capital account it shows what is owed to the owner. Increasing cash means we received cash. Decreasing cash means we paid out cash. Different sides of the equation. 2. Paid $600 cash for April office rent. We decreased cash and decreased owner’s equity through expenses. Different sides of the equation. 3. Purchased office equipment for $3,000 cash. We decreased cash and increased an asset called equipment. Same side of the equation. 4. Incurred $700 of advertising costs in the Chicago Tribune, on account. When it says “on account” that means that we purchased something but did not pay for it. Meaning we bought it on credit.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 5 pages?

  • Fall '18
  • Mrs. Hess
  • Balance Sheet, Generally Accepted Accounting Principles, increase cash, Vince Morelli

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes