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

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

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

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

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

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

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

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

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

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

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