1. Tutorial 2: Accounting Equation & Source Documents
Question 1
Classify the items below as assets (A), liabilities (L), owner’s equity (OE), revenue (R) or
expenses (E) by inserting the abbreviation for the relevant group.
Buildings Discount revenue Sales
Wages Purchases Creditors
Loan to debtor Rent revenue Equipment
Drawings Capital Bad debts
Telephone bill Debtors Advertising
Interest paid Freight costs Discount allowed
Net profit Bank overdraft Salaries
Question 2
For each transaction, show the effects on the accounting equation.
2002
Apr 1 J. Owen began business with cash in hand RM500, cash at bank RM5,500 and
motor vehicle RM9,600.
8 Bought office equipment valued at RM800 on credit from Lau Trading.
1 Sold motor vehicle with book value RM9,600 for cash RM9,600. Cash was
4 banked into the business account.
2 Bought a new motor vehicle worth RM25,800 for business use. A cash deposit of
3 RM2,580 was paid by cheque and the balance was to be paid in monthly
instalments.
3 J. Owen transferred cash RM2,000 from his personal account into the company
0 account.
Question 3
Use the following information to answer question 5(a) and 5 (b).
Below are the transactions between X and Y.
Jan 4 X bought goods on credit from Y
6 X returned a quarter of these goods to Y
17 X paid Y
3(a) Name the documents used by both X and Y to record each of the above transactions in their
respective books.
Source document used by X Source document used by Y
Jan 4 (i) …………………… (ii) ……………………..
Jan 6 (iii) ………………....... (iv) ……………………..
Jan 17 (v) …………………… (vi) ……………………..
3(b) If X does not fully settle his debt on 17 January, what document do you think Y will send to
X at the end of January?