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Accounts Ref Sheet

The document outlines various financial transactions and their effects on assets, liabilities, and capital. It categorizes transactions such as capital introduction, goods purchases, sales, expenses, and loans, indicating whether they increase or decrease capital. Additionally, it summarizes situations that lead to increases or decreases in capital for a business.

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shashi.sparkles
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8 views2 pages

Accounts Ref Sheet

The document outlines various financial transactions and their effects on assets, liabilities, and capital. It categorizes transactions such as capital introduction, goods purchases, sales, expenses, and loans, indicating whether they increase or decrease capital. Additionally, it summarizes situations that lead to increases or decreases in capital for a business.

Uploaded by

shashi.sparkles
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Transaction / Assets Liabilities Capital

Adjustment

Capital Introduced Increases (Cash) No change Increases

Goods Purchased for No change (Cash ↓, Stock No change No change


Cash ↑)

Goods Purchased on Increases (Stock) Increases (Creditors) No change


Credit

Goods Sold (for Profit) Increases (Cash) No change Increases (by


Profit)

Goods Sold (at Cost) No change (Cash ↑, Stock No change No change


↓ equal value)

Expenses Paid (e.g. Decreases (Cash) No change Decreases


salaries) (Expense)

Outstanding Expense No change Increases (Outstanding Decreases


Expenses) (Expense)

Prepaid Expense (Paid Increases (Prepaid No change No change


in Advance) Expenses)

Accrued Income Increases (Accrued No change Increases


Income) (Income)

Accrued Interest Increases (Accrued No change Increases


Interest) (Income)

Income Received in Increases (Cash) Increases (Advance No change


Advance Income)

Payment to Creditors Decreases (Cash) Decreases (Creditors) No change

Withdrawal (Drawings) Decreases (Cash/Stock) No change Decreases


(Drawings)

Purchase of Fixed Asset No change (Fixed Asset ↑, No change No change


for Cash Cash ↓)
Loan Taken from Bank Increases (Cash) Increases (Loan No change
Payable)

Repayment of Loan Decreases (Cash) Decreases (Loan No change


Payable)

📌 Situation 🔺 Increases Capital 🔻 Decreases Capital


Owner introduces capital into business ✅ Yes —

Business earns a profit (from any source) ✅ Yes —

Accrued income or accrued interest recorded ✅ Yes —

Expenses paid (e.g. rent, salaries, wages) — ✅ Yes


Outstanding expenses recorded — ✅ Yes
Owner withdraws cash or goods (Drawings) — ✅ Yes
Business incurs a loss — ✅ Yes

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