TheendingbalanceintheEquityStatementprovidestheCapitalontheB...

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- The ending balance in the Equity Statement provides the Capital on the Balance Sheet at the end of the  period.  Here is the solution A) Capital (beginning balance) + investments by owner + net income – drawing = Capital (ending balance) --- Equity statement B) Revenues- expense = Net income ----- Income Statement C) Assets= Liabilities + capital---- Balance Sheet Practice 1 A) Revenues- Expense = Net Income----- Income Statement B) Assets= Liabilities + capital --- Balance Sheets C) Capital (beginning Balance + Investments by owner + Net income – Drawing= capital (ending Balance) ---- Equity Statement Practice 2 A) Assets = Liabilites + Capital ----- Balance Sheets B) Revenues- Expense = Net Income --- Income Statement C) Capital (beginning balance) + Investments by Owner + net income – Drawing = Capital (Ending balance) ---- Equity Statement
10 | P a g e Practice 3 A) Assets = Liabilities + Capital------ Balance Sheets B) Capital (beginning balance) + Investments by Owner + Net Income – Drawing = Capital (ending balance)------ Equity Statement. C) Revenue – Expense = Net Income----- Income Statement Effect of transactions on accounts
11 | P a g e The  Supplies  account decreases since the supplies have been used. Equity  decreases due to an increase in Supplies Expense account.  Capital Noun . (Accounting.) Also called  Capital Account . The equity account representing business  ownership in a sole proprietorship. The owner's capital is the same as owner's equity and  represents the owner's claim to the (net) assets (i.e., assets minus liabilities). Capital is reported on the statement of owner's equity. Accounts Receivable Noun phrase . (Accounting.) Also called  Trade Receivables . Amounts due from customers from  the sale of goods or services on account. Receivables are reported on the balance sheet as  current assets and normally constitute the largest type of claim (receivable) held by a company.  These amounts are usually due to be received in cash in thirty to sixty days. Accounts Receivable is debited (increased) when a sale on account of goods or  services is made. When a payment is received from a customer on account, Accounts  Receivable is credited (decreased). Accounts Receivable is also credited (decreased)  by write-offs of uncollectible accounts. Example: On October 2, Michel's Supplies sold construction material, $1,600 (cost  $900), terms 2/10, net 30, to Omar Construction. Omar Construction returned $600  worth of damaged merchandise on October 5 and paid the balance due on October 12.  The following journal entries are made to record these transactions. Oct. 2 Accounts Receivable, Omar Construction 1600 Sales 1600 To record sale on account. Oct. 2 Cost of Goods Sold 900 Merchandise Inventory 900 To record Cost of Goods Sold. Oct. 5 Sales Returns and Allowances 600 Accounts Receivable, Omar Construction 600
12 | P a g e To record return of merchandise. Oct. 12 Cash 980 Sales Discount (2%  ×  $1,000) 20 Accounts Receivable 1000 To record payment within discount period. A customer who cannot pay the balance due on time may arrange with the seller to postpone  payment by issuing a promissory note.

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