ABC is a new business that started on 1 July, the business pays £3,000 into the business bank account.
a. What is the dual effect of this transaction?
b. What is the accounting equation after this transaction?
Case study 2
XYZ business on started on the 1 January by paying £40,000 into a business bank account.
The business then spent £600 on a second-hand van paid by debit card, £2,000 on purchases of inventory for cash, took £600 cash for his own use and bought goods on credit worth £500.
a. What are the two effects of each of these transactions?
b. What would the accounting equation look like after each of these transactions?
