I need to know if this is correct, if its not an explanation would be great :) I'm not an accounting student, just taking it for GE and I'm just confused..

Indicate where each tansaction causes an increase (+), decrease (-) or no change (NC) in assets, liabilities and equity

(type of transaction - asset/liability/equity)
Purchase supplies on credit - NC/+/-
Paid for previously purchases supplies - -/NC/-
Paid for employees weekly salary - -/NC/-
Paid out owner's draw - -/NC/-
Purchases a truck with cash - -/NC/-
Received a telephone bill to bepaid next month - no idea


One more...
At the beginning on the year, Gilbert Co's assets were $180,000 and its equity was $100,000. During the year assets increased by 60,000 and liabilities increased by 10,000. What was the equity at the end of the year?

I thought Assets=Liabilities + Owners Equity but it doesn't seem right when I do it. Are Assets always perfectly equal to L and OE?

180000=80000+100000
+60000=+10000
240,000=90,000+150,000

making OE at the end of the year $150,000? It just seems like its too much.

Indicate where each tansaction causes an increase (+), decrease (-) or no change (NC) in assets, liabilities and equity

(type of transaction - asset/liability/equity)
Purchase supplies on credit - NC/+/-

NO.
Journal Entry is
Debit Supplies (ASSET goes up)
Credit Accounts Payable (Liability goes up)

So, Assets go up, and so do liabilities, no change to equity

A/L/OE
+/+/NC



Paid for previously purchases supplies - -/NC/-

NO.
Journal Entry is
Debit Accounts Payable (Liability goes down)
Credit Cash (ASSET goes down)


A/L/OE
-/-/NC



Paid for employees weekly salary - -/NC/-


Correct


Paid out owner's draw - -/NC/-

Correct



Purchases a truck with cash - -/NC/-


NO.
Journal Entry is
Debit Truck (Assets goes up)
Credit Cash (ASSET goes down)

They cancel each other out.

A/L/OE
NC/NC/NC




Received a telephone bill to bepaid next month - no idea


Journal Entry is
Debit Telephone Expense (equity goes down)
Credit Accounts Payable (Liability goes up)

A/L/OE
NC/+/-




Remember: Assets = Liabilities + OE

So if Assets go up, then either Liabilities and/or OE must go up to match it.
If Liabilities go up, assets must go up OR OE must do down to cancel it out.

One more...
At the beginning on the year, Gilbert Co's assets were $180,000 and its equity was $100,000. During the year assets increased by 60,000 and liabilities increased by 10,000. What was the equity at the end of the year?

I thought Assets=Liabilities + Owners Equity but it doesn't seem right when I do it. Are Assets always perfectly equal to L and OE?

180000=80000+100000
+60000=+10000
240,000=90,000+150,000

making OE at the end of the year $150,000? It just seems like its too much.

It might seem like to much, but in the context of this question, you are correct. Owner's Equity is $150,000 in this case.

You can think about it logically.

If I increase my total Assets by $60,000 but I only increase my total debt (liabilities) by $10,000 then that means I made a $50,000 increase in my total equity.

So old equity was $100,000 + $50,000 that I made this year so my new equity is $150,000

If liabilities =35,000 and net assets = 50,000, what does assets equal?

Quote:

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Originally Posted by mfram

Indicate where each tansaction causes an increase (+), decrease (-) or no change (NC) in assets, liabilities and equity

(type of transaction - asset/liability/equity)
Purchase supplies on credit - NC/+/- ok
Paid for previously purchases supplies - -/NC/- depending on the bank account balance reduces an asset, reduces a liability has no effect on equity
Paid for employees weekly salary - -/NC/- ok
Paid out owner's draw - -/NC/- ok
Purchases a truck with cash - -/NC/- NC/-/-
Received a telephone bill to bepaid next month - NC/+/-


.

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I have made comments above obviously you have to decide the status of the bank account whether it is an asset or a liability