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ACCT 1201 (75)
Chapter 2

# Chapter 2 Activities.docx

13 Pages
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School
Northeastern University
Department
Accounting
Course
ACCT 1201
Professor
Ronen Gal-or
Semester
Spring

Description
Chapter 2 Activities Activity 2 – 1 ANALYZING TRANSACTIONS Analyze each of the following transactions of World Wide Webster by performing each of the following. Then, use the chart on the following page to keep track of the amount in each account: (a) Stockholder invests \$10,000 into the business. 1 Decide if a transaction took place. Yes . 2 . Identify the accounts affected. Cash and common stock 3 Classify each account affected. Asset and stockholders equity . 4 Identify direction and amount. Increase in cash and increase common stock . for 10,000 5 . Ensure the accounting equation is in balance. (b) Borrow \$15,000, using a note payable to the bank. 1 Decide if a transaction took place. Yes . 2 Identify the accounts affected. Cash and note payable . 3 . Classify each account affected. Asset and liability 4 Identify direction and amount. Increase cash and note payable by 15,000 . 5 Ensure the accounting equation is in balance. . (c) Acquire a \$15,000 truck and \$5,000 worth of equipment. 1 Decide if a transaction took place. Yes . 2 Identify the accounts affected. Cash and equipment . 3 . Classify each account affected. Asset and asset 4 . Identify direction and amount. Increase equipment and decrease cash 5 Ensure the accounting equation is in balance. . 1 Chapter 02 - Investing and Financing Decisions and The Balance Sheet Activity 2 – 1, continued (d) Purchase \$300 worth of supplies on credit. “On credit” (on account) means that you receive the supplies now, and pay for them later. 1. Decide if a transaction took place. Yes 2. Identify the accounts affected. Accounts payable and supplies 3. Classify each account affected. Liabilities and assets 4. Identify direction and amount. Increase in both 5. Ensure the accounting equation is in balance. (e) Sign contract for first website design for \$10,000. 1. Decide if a transaction took place. No 2. Identify the accounts affected. 3. Classify each account affected. 4. Identify direction and amount. 5. Ensure the accounting equation is in balance. Chart Assets = Liabilities + SE Prope rty, Acco Contri Suppl Plant unts Notes buted Ref. Cash + ies + & = Payab + Payab + Capit le Equip le al ment (a) +10,0 +10,0 00 00 +15,0 +15,0 (b) 00 00 - +20,0 (c) 20,00 00 0 (d) +300 +300 (e) 2-2 3 Chapter 02 - Investing and Financing Decisions and The Balance Sheet Activity 2 – 2 ANALYZING TRANSACTIONS Analyze each of the following transactions of World Wide Webster by performing each of the following. Then, use the chart on the following page to keep track of the amount in each account: (f) Company pays off \$300Accounts Payable. 1 Decide if a transaction took place. . 2 Identify the accounts affected. . 3 . Classify each account affected. 4 Identify direction and amount. . 5 Ensure the accounting equation is in balance. . (g) Company pays for and receives \$600 worth of supplies. 1 . Decide if a transaction took place. 2 Identify the accounts affected. . 3 . Classify each account affected. 4 Identify direction and amount. . 5 Ensure the accounting equation is in balance. . (h) Company acquires and receives \$1,000 worth of equipment. 1 . Decide if a transaction took place. 2 Identify the accounts affected. . 3 . Classify each account affected. 4 Identify direction and amount. . 5 Ensure the accounting equation is in balance. . (i) Order a \$900 lawn mower, to be delivered next month. 1 . Decide if a transaction took place. 2-4 2 Identify the accounts affected. . 3 Classify each account affected. . 4 . Identify direction and amount. 5 Ensure the accounting equation is in balance. . 5 Chapter 02 - Investing and Financing Decisions and The Balance Sheet Activity 2 – 2, continued (j) Hired a new CEO, agreeing to pay her \$1 million per year 1 Decide if a tran
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