Accounting Grade 11

• Economie

Revenue

Expense

Withdrawal

Investment

Income earned from the sale of goods or services

is the cost of products or

services used to operate a business.

If a business earns revenue, the owner will take cash or other

assets from the business for personal use.

money or other property paid out in order to

produce profit.

Objectives of the lesson

1.Describe the transactions

2.Determining the effect of transactions on the accounting equation 

3. Draw a diagram to show how revenue ,expenses and withdrawals affect the accounting equation

Chapter 3

Section3.3:Transactions that affect revenue , expense and Withdrawals by the owner

Type of transaction
Revenue, Expense, Investment and Withdrawal. Use the above to describe the transaction

Does the owner's equity increase or decrease for revenue?

Does owner's equity increase or decrease for investment?

Use the accounts of Word Service to analyze these
business transactions. The beginning balance for each account is shown  following the account name.

Assets                                                      Liabilities +                  Owner’s Equity

Cash in Bank, $24,000                    Account Payable          Jan Swift,Company

Accounts Receivable, $700                   $300                              $30,700

Computer Equipment, $4,000

Office Equipment, $5,000

Paid $50 for advertising in the local newspaper

Received $1,000 as payment for preparing a report.

Wrote a $600 check for the month’s rent.

Jan Swift withdrew $800 for her personal use.

Received $200 on account from the person who had purchased the
old office furniture

Draw a diagram or a mind map to show the effect of revenue , expense and withdrawal on the accounting equation.

Important terms of lesson

Answers

1. Revenue, the business receives a    

check from a customer for services,

increases owner’s equity

2. Expense, the owner wrote a check to

pay the rent for the month, decreases

owner’s equity

3. Investment, the owner took cash from

a personal savings account to open a

business checking account, increases

owner’s equity

4. Withdrawal, the owner withdrew cash

from the business for personal use,

decreases owner’s equity

1. Cash in Bank decreased by $50. Jan

Swift, Cap. decreased by $50.

2. Cash in Bank increased by $1,000. Jan

Swift, Cap. increased by $1,000.

3. Cash in Bank decreased by $600. Jan

Swift, Cap. decreased by $600.

4. Cash in Bank decreased by $800. Jan

Swift, Cap. decreased by $800.

5. Cash in Bank increased by $200. Accts.

Rec. decreased by $200.