Homework Answers
The transactions will be analyzed in the following manner:
| Basic Account | Financial Statement | Normal balance | Effect of a debit | Effect of a credit | |
| a Cash | Asset | Balance Sheet | Debit | Increase | Decrease |
| a. Yoojin Chang Capital Account | Owner's Capital | Balance Sheet/Statement of Changes in Equity | Credit | Decrease | Increase |
| b Equipment | Asset | Balance Sheet | Debit | Increase | Decrease |
| b Accounts Payable | Liability | Balance Sheet | Credit | Decrease | Increase |
| c Equipment | Asset | Balance Sheet | Debit | Increase | Decrease |
| c Cash | Asset | Balance Sheet | Debit | Increase | Decrease |
| d Cash | Asset | Balance Sheet | Debit | Increase | Decrease |
| d Design Revenue | Revenues | Income Statement | Credit | Decrease | Increase |
Explanation
Balance Sheet contains information on Assets, Liabilities & Equity
Income Statement contains information on Revenues and expense of the company
Statement of Changes in equity contains components which are responsible for the changes in equity from beginning of the period to end of the period. This include stock issued, dividends paid, withdrawals made, net income etc.
Normal balance of the accounts are:
Assets - Debit balance - increase with debit, decrease with credit
Expenses - Debit balance - increase with debit, decrease with credit
Liabilities - Credit balance - increase with credit, decrease with debit
Revenues - Credit balance - increase with credit, decrease with debit
Equity - Credit balance - increase with credit, decrease with debit
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