# Accounting week 1 | Accounting homework help

PART I: SHORT RESPONSE

Directions: Please respond to each of the following questions.  Write at least 3 to 5 sentences for each question.

1.   List and explain the four items under the umbrella of owner’s equity, including whether it increases or decreases overall equity.

2.   What is the fundamental accounting equation, including examples of each item of the equation?

3.   Explain the separate entity concept, including why it is important to accounting.

PART II: APPLICATION

Directions: Please answer each of the following questions.  Show your work as necessary.

1.   T. Richtor established her own business, called Richtor’s Self-Storage.  Use the account headings presented below in the expanded accounting equation to record the monthly transactions.

 Assets = Cash + Accounts Receivable + Supplies + Prepaid Insurance + Office Equipment Liabilities + Owner’s Equity Accounts Payable T. Richtor, Capital  T. Richtor, Drawing + Revenue  Expenses

 a. Deposited \$12,000 in a bank account in the name of the business. b. Bought office equipment on account from Molly Company, \$3,100. c. Paid rent for the month, \$2,400. d. Bought supplies for cash, \$450. e. Paid wages, \$980. f. Received cash for storage services, \$3,600. g. Received and paid the utility bill, \$252. h. Paid Lar’s Graphics for advertising, \$428. (The bill was not previously recorded.) i. Paid for a one-year liability insurance policy, \$835. j. Billed customers for storage services on account, \$3,370. k. Received cash for storage services, \$2,300. l. Paid wages, \$990. m. Paid Molly Company \$1,100 as partial payment on the office equipment bought in transaction b. n. Richter withdrew \$1,200 for personal use.

Instructions:

 1 Record the transactions in columnar form, write plus and minus signs, and show the balance after each transaction to be sure that the equation remains in balance. 2 Write the proof of totals at the bottom to show that one side of the equation equals the other side.

 Assets = > Accounts Prepaid Office > Cash + Receivable + Supplies + Insurance + Equipment = > a. > b. = > Bal. = > c. > Bal. = > d. > Bal. = > e. > Bal. = > f. > Bal. = > g. > Bal. = > h. > Bal. = > i. > Bal. = > j. > Bal. = > k. > Bal. = > l. > Bal. = > m. > Bal. = > n. > Bal. = >

 < Liabilities + Owner’s Equity < Accounts T. Richtor, T. Richtor, < Payable + Capital  Drawing + Revenue  Expenses < a. + < b. < Bal. + < c. < Bal. +  < d. < Bal. +  < e. < Bal. +  < f. < Bal. + +  < g. < Bal. + +  < h. < Bal. + +  < i. < Bal. + +  < j. < Bal. + +  < k. < Bal. + +  < l. < Bal. + +  < m. < Bal. + +  < n. < Bal. +  + 

 Left Side of Equals Sign: Right Side of Equals Sign: Cash \$ Accounts Payable \$ Accounts Receivable T. Richtor, Capital Supplies T. Richtor, Drawing Prepaid Insurance Revenue Office Equipment Expenses

2.   On September 1 of this year, B. Rourk established Rourk Delivery Service.  During the month, the company had the following transactions:

Instructions:

Find six errors that were made in recording the transactions, and state how they should have been recorded.

3.   L. Hamilton established his own business, called Fix-It Yourself.  Using the fundamental accounting equation, record the transactions for the month provided below for the business:

 Assets = Liabilities + Owners Equity Accounts Used

a.)    Owner deposited \$5,800 in a bank account in the name of the business.

b.)    Company bought equipment, paying cash, \$1,500.

c.)    L. Hamilton invested personal equipment in the business with fair market value of \$3,300.

d.)   Company bought supplies on account from a creditor, \$750.

e.)    Company paid creditor from transaction d, \$250.

f.)     Owner deposited \$1,000 in personal checking account.

Instructions:

 1. Record the transactions in columnar form including the following: *write plus and minus signs, * show the balance after each transaction to verify *and list the account titles needed to record each transaction. 2. Write the proof of totals at the bottom to show that one side of the equation equals the other side.

 Assets = Liabilities + Owners Equity Accounts Used a.) = b.) = =