Paid wages of 5200 solve this accounting equation

Mathematics

ScanSolve AI Answer

Step-by-step solution

5 steps

  1. Analyze the transaction.

    Paying wages means the business is incurring an expense and paying cash.

  2. Determine the impact on Assets.

    Cash (an asset) decreases because wages are paid out.

    Assets=−R5200\text{Assets} = - \text{R}5200

  3. Determine the impact on Owners' Equity.

    Wages are an expense, and expenses decrease Owners' Equity.

    Owners’ Equity=−R5200\text{Owners' Equity} = - \text{R}5200

  4. Determine the impact on Liabilities.

    This transaction does not involve any liabilities.

    Liabilities=R0\text{Liabilities} = \text{R}0

  5. Apply to the accounting equation.

    Assets=Owners’ Equity+Liabilities\text{Assets} = \text{Owners' Equity} + \text{Liabilities} −R5200=−R5200+R0- \text{R}5200 = - \text{R}5200 + \text{R}0

    The equation remains balanced.

    The solution is:

    • Assets: Decrease by R5200
    • Owners' Equity: Decrease by R5200
    • Liabilities: No change

    Assets (-R5200)=Owners’ Equity (-R5200)+Liabilities (R0)\boxed{\text{Assets (-R5200)} = \text{Owners' Equity (-R5200)} + \text{Liabilities (R0)}}

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