Complete the table below to show the effect of the following transactions on the accounting equation.

Question

ScanSolve AI Tutor · Accepted Answer

Here is the completed table showing the effect of the transactions on the accounting equation:

No.	Source document	ASSETS (+/-)	EQUITY (+/-)	LIABILITIES (+/-)
1	Invoice/EFT confirmation	R0	R0	R0
2	EFT confirmation	-R4 900	-R4 900	R0
3	Wage register	-R3 000	-R3 000	R0
4	Bank statement	-R250	-R250	R0
5	EFT confirmation	-R3 500	R0	-R3 500

Here's a step-by-step explanation for each transaction:

Transaction 1 - Buy a secondhand vehicle at VW Motors for R38 000.
- Source document: An Invoice from VW Motors for the purchase and an EFT confirmation (or cheque counterfoil) for the payment.
- Assets: The asset 'Vehicle' increases by R38 000, and the asset 'Bank' (cash) decreases by R38 000. The net effect on total assets is R0.
- Equity: No change.
- Liabilities: No change.
- Accounting Equation: $\Delta \text{Assets} = \text{R0}$ , $\Delta \text{Equity} = \text{R0}$ , $\Delta \text{Liabilities} = \text{R0}$ . (R0 = R0 + R0)
Transaction 2 - Transfer R4 900 electronically to Alta Offices for the rental of the office building.
- Source document: An EFT confirmation or Bank statement confirms the electronic transfer.
- Assets: The asset 'Bank' (cash) decreases by R4 900.
- Equity: Rent is an expense, which decreases owner's equity by R4 900.
- Liabilities: No change.
- Accounting Equation: $\Delta \text{Assets} = \text{-R4 900}$ , $\Delta \text{Equity} = \text{-R4 900}$ , $\Delta \text{Liabilities} = \text{R0}$ . (-R4 900 = -R4 900 + R0)
Transaction 3 - Pay wages by making a cash withdrawal of R3 000.
- Source document: A Wage register records the payment of wages, and a Cheque counterfoil (if withdrawing from the bank) or cash slip.
- Assets: The asset 'Cash' (or Bank, if withdrawn from bank) decreases by R3 000.
- Equity: Wages are an expense, which decreases owner's equity by R3 000.
- Liabilities: No change.
- Accounting Equation: $\Delta \text{Assets} = \text{-R3 000}$ , $\Delta \text{Equity} = \text{-R3 000}$ , $\Delta \text{Liabilities} = \text{R0}$ . (-R3 000 = -R3 000 + R0)
Transaction 4 - The Bank statement received from South Bank shows bank charges of R250.
- Source document: A Bank statement is the official document showing bank charges.
- Assets: The asset 'Bank' (cash) decreases by R250.
- Equity: Bank charges are an expense, which decreases owner's equity by R250.
- Liabilities: No change.
- Accounting Equation: $\Delta \text{Assets} = \text{-R250}$ , $\Delta \text{Equity} = \text{-R250}$ , $\Delta \text{Liabilities} = \text{R0}$ . (-R250 = -R250 + R0)
Transaction 5 - Repay the loan by means of an electronic transfer of R3 500.
- Source document: An EFT confirmation or Bank statement confirms the electronic transfer.
- Assets: The asset 'Bank' (cash) decreases by R3 500.
- Equity: No change.
- Liabilities: The liability 'Loan' decreases by R3 500.
- Accounting Equation: $\Delta \text{Assets} = \text{-R3 500}$ , $\Delta \text{Equity} = \text{R0}$ , $\Delta \text{Liabilities} = \text{-R3 500}$ . (-R3 500 = R0 + -R3 500)

Complete the table below to show the effect of the following transactions on the accounting equation.

Step-by-step solution

Transaction 1 - Buy a secondhand vehicle at VW Motors for R38 000.

Transaction 2 - Transfer R4 900 electronically to Alta Offices for the rental of the office building.

Transaction 3 - Pay wages by making a cash withdrawal of R3 000.

Transaction 4 - The Bank statement received from South Bank shows bank charges of R250.

Transaction 5 - Repay the loan by means of an electronic transfer of R3 500.

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