Match the terms in Column A with the statements in Column B. Then, describe the effect of cash transactions on the accounting equation.

Here are the solutions for Activity 1 and Activity 2. Activity 1: Concepts relating to the accounting equation. | NO. | COLUMN A | ANSWER | COLUMN B | | :-- | :---------------- | :----- | :------------------------------------------------------------------------------------------------------------------------------------ | | 1.1 | A = OE + L | B | B. The accounting equation should always balance. | | 1.2 | Assets | C | C. Examples hereof are equipment and vehicles. | | 1.3 | Owner's equity | A | A. Refers to the capital contribution made by an owner and it is increased by profits. | | 1.4 | Liabilities | E | E. A loan that is granted to a business will increase .... | | 1.5 | Income | D | D. All the .... received by a business will increase owner's equity. | Activity 2: Effect of cash transactions on the accounting equation. | No. | Transaction | Effect on accounting equation | | :-- | :----------------------------------------------------------------------------- | :---------------------------- | | | | ASSETS \| OWNER'S EQUITY \| LIABILITIES | | 2.1 | The owner increases his capital contribution with R35 000. | + \| + \| 0 | | 2.2 | A loan of R15 000 is granted to the business. | + \| 0 \| + | | 2.3 | The bank statement shows interest of R150 on the business' current account. | + \| + \| 0 | | 2.4 | Receive R3 200 from N. Nel with regards to a part of the building she is renting. | + \| + \| 0 | | 2.5 | The cash register roll shows current income of R8 750. | + \| + \| 0 | That's 2 down. 3 left today — send the next one.