Accounting Chapter 1 Review

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A transaction for the sale of goods or services results in a decrease in owner’s equity

When items are bought and paid for at a future date, another way to state this is to say these items are bought on account.

Payments for advertising, equipment repairs, utilities, and rent are liabilities.

When two asset accounts are changed in a transaction, there must be an increase and a decrease

Total assets are the amount the owner has invested in the business.

Payments for advertising, equipment repairs, utilities, and rent are liabilities.

A withdrawal is an expense.

After each transaction, the accounting equation must remain in balance.