How each transaction changes the accounting equation
Every transaction changes two things, and assets always equal liabilities plus capital. Follow a new coffee van through its first eight.
Task 1Two changes every time2 questions
Every transaction changes two things. The accounting equation, assets equal liabilities plus capital, stays true after each one.
- Assets and liabilities both go up: money is borrowed, or something is bought on credit
- Assets and liabilities both go down: a debt is paid
- One asset goes up and another goes down: equipment is bought from the bank
- Assets and capital both go up: the owner pays money in
Kestrel Coffee is a coffee van owned by Jo Kestrel.
Task 2Income and expenses change capital3 questions
You work out a figure and find the mistake in a table.