A=L+E Examples

Question 1

Buy supplies on credit

Answer 1

Assets: + inventory, Liabilities: +Accounts payable

Question 2

Pay cash for machine

Answer 2

Assets: -Cash, +property

Question 3

Pay money owed to supplier

Answer 3

Assets: -cash, Liabilities: -accounts payable

Question 4

Receive customer payment

Answer 4

Assets: +cash, -accounts receivable

Question 5

Sell product to customer

Answer 5

Assets: +cash, -inventory, Equity: +retained earning

Question 6

Borrow from a bank

Answer 6

Assets:+cash, liabilities, +debt

Question 7

Issue Stock

Answer 7

Assets: +cash, Equity, +paid in capital