1. How Transactions Change Owner ’ s Equity in an Accounting Equation Section 1-3

2. Revenue An increase in owner’s equity resulting from the operation of a business

3. Trans. 6: Received cash from sales Assets = Liabilities + Owner’s Equity Cash+50Revenue+50

4. Sales on Account A sale for which cash will be received at a later date

5. Trans. 7: Sold services on account Assets = Liabilities + Owner’s Equity Accounts Receivable +150 Revenue +150

6. Expenses A decrease in owner’s equity resulting from the operation of a business

7. Trans. 8: Paid cash for rent Assets = Liabilities + Owner’s Equity Cash -400Expense -400

8. Trans. 9: Paid cash for telephone bill Assets = Liabilities + Owner’s Equity Cash -40Expense -40

9. Trans. 10: Received cash on account Assets = Liabilities + Owner’s Equity Cash +200 AR -200

10. Withdrawals Assets taken out of the business for the owner’s personal use

11. Trans. 11: Paid cash to owner for personal use Assets = Liabilities + Owner’s Equity Cash -100Withdrawal 1100