ACTBAS1 Reviewer 1 - ACTBAS1 Reviewer Account format ABC...

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ACTBAS1 Reviewer Account format Report format Accounting equation: Assets = Liabilities + Owner’s Equity To debit (+) in Assets, (-) in Liabilities, (-) in Owner’s Equity {expenses; withdrawals} To credit (-) in Assets, (+) in Liabilities, (+) in Owner’s Equity {revenue} * Common errors in accounting equation: 1) Transaction: The business paid personal credit of the owner. Answer: (-) in Asset – Cash; (-) in O.Equity – Drawing; JE form: Owner, drawing P xxx- Cash P xxx- Recall: decreases in assets will be credited and decreases in owner’s equity will be debited. 2) Transaction: Billed customer for services rendered. Answer: (+) in Asset – Accts. Receivable; (+) in O. Equity – Service Income JE form: Accts. Receivable P xxx – Service Income P xxx – Recall: increases in asset = debited; increases in O.Equity = credited. 3) Transaction: Owner paid utility bills using own/personal money. Answer: (-) O. Equity – Utilities Expense; (+) O. Equity – Owner, Capital.
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ACTBAS1 Reviewer 1 - ACTBAS1 Reviewer Account format ABC...

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