Look at the following transactions of Andrew Rose. How will they affect the double-entry
equation? Enter the changes to each component of the equation (as pluses and minuses)
in the table below, and then show the overall effect on the double-entry equation. The
changes relating to the first two transactions have been entered as an example.
1 1 January Starts a business by opening a bank account with £4,000
2 2 January Buys goods for resale with a bank transfer of £2,000
3 3 January Sells goods for cash, £700
4 4 January Pays wages £300 by cash
5 5 January Buys stationery from Paper Products valued at £700. Andrew
expects to pay for the stationery in a month’s time
6 6 January Buys a computer with a bank transfer, £1,000
7 7 January Sells goods to Sarah Prince for £820. Sarah hopes to pay in two
months’ time
8 8 January Andrew pays a lottery win of £1,000 into the business bank
account
9 9 January Andrew draws out £100 from the business bank account for his
own use
10 10 January Andrew buys goods for resale costing £1,500 from BiggaBuys,
and intends to pay for them in a month’s time
| Assets £ |
Expenses £ |
Liabilities £ |
Equity £ |
Income £ |
| 1 +4,000 (Bank) |
+4,000 | |||
| 2 -2,000 (Bank) |
+ 2,000 (Purchases) |
|||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| 9 | ||||
| 10 |
