Debit credit liability owner's equity business transactions

- Debit: an amount of money that is taken from an account
- Credit: money that a bank or business will allow a person to use and then pay back in the
future
- Liability: payment or money for a which a person or business is legally responsible
Owner’s Investment to Form the Business
June 1: Joan Miller invests $40,000 in cash to form Miller Design Studio.
Assets = Liabilities + Owner’s Equity
Cash Miller, Capital
June 1 $40,000 June 1 $40,000
June 2: Orders office supplies $5,200
June 3: Rents office pay 2 months’ rent in advance, $3,200
Assets = Liabilities + Owner’s

Equity
Cash Miller, Capital
June 1 June 3 $3,200 June 1 $40,000

$40,000
Prepaid rent
June 3 $3,200
June 5: Receives office supplies ordered on 2/6, and invoice for $5,200

Equity
Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 5 $5,200 June 1 $40,000
Prepaid rent
June 3 $3,200
Office supplies
June 5 $5,200
June 6 Purchases office equipment, $16,320; pays $13,320 in cash and agrees to pay rest in the
next month

Equity
June 1 $40,000 June 3 $3,200 June 5 $5,200 June 1 $40,000
June 6 $13,320 June 6 $3,000
Prepaid rent
June 3 $3,200
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
June 9 Makes a partial payment of the amount owed office supplies received on June 5, $2,600

Equity
June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000
June 6 $13,320 June 6 $3,000

June 9 $2,600
Prepaid rent
June 3 $3,200
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
June 10 performs a service for an investment advisor by designing a series of brochures and
collects a fee in cash, $2,800
+ perform: to do an action or activity that usually requires training or skill

Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 9 $2,600
Prepaid rent Design Sales

June 3 $3,200 June 10 $2,800
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
June 15 performs a service for a department store by designing a TV commercial bills for the fee
now but will collect the fee later, $9,600
Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 9 $2,600
Prepaid rent Design Sales

June 3 $3,200 June 10 $2,800
June 15 $9,600
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
A/c Receivable
June 15 $9,600
June 19 Accepts an advance fee as a deposit on a series of brochures to be designed, $1,400

Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 19 $1,400 June 9 $2,600

Prepaid rent Unearned Revenue Design Sales
June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
A/c Receivable
June 15 $9,600
June 22 Receives cash from customer previously billed on June 15, $5,000

Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 19 $1,400 June 9 $2,600
June 22 $5,000

June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600
Office supplies
June 5 $5,200
Office equipment
June 6 $16,320
A/c Receivable
June 15 $9,600 June 22 $5,000
June 26 pays employees four weeks’ wages, $4,800

Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 19 $1,400 June 9 $2,600
June 22 $5,000 June 26 $4,800

June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600
Office supplies Wages expenses

June 5 $5,200 June 26 $4,800
Office equipment
June 6 $16,320
A/c Receivable
June 15 $9,600 June 22 $5,000
June 30 Receives but does not pay, the utility bill that is due next month $680

Equity
June 10 $2,800 June 6 $13,320 June 6 $3,000
June 19 $1,400 June 9 $2,600
June 22 $5,000 June 26 $4,800
June 30 $680

June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600

June 5 $5,200 June 26 $4,800
Office equipment Utility expenses

June 6 $16,320 June 30 $680
A/c Receivable
June 15 $9,600 June 22 $5,000
June 30 Withdraw $2,800 in cash

June 10 $2,800 June 6 $13,320 June 6 $3,000
June 19 $1,400 June 9 $2,600 June 30 $680

June 22 $5,000 June 26 $4,800
June 30 $2,800

June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600

June 5 $5,200 June 26 $4,800
Office equipment Utility expenses

June 6 $16,320 June 30 $680
A/c Receivable Miller, Withdrawals

June 15 $9,600 June 22 $5,000 June 30 $2,800

Debit credit liability owner's equity business transactions

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Debit credit liability owner's equity business transactions

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- Debit: an amount of money that is taken from an account

- Liability: payment or money for a which a person or business is legally responsible

Owner’s Investment to Form the Business

Assets = Liabilities + Owner’s Equity

Cash Miller, Capital

June 1 $40,000 June 1 $40,000

June 2: Orders office supplies $5,200

June 3: Rents office pay 2 months’ rent in advance, $3,200

Assets = Liabilities + Owner’s

Cash Miller, Capital

June 1 June 3 $3,200 June 1 $40,000

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 5 $5,200 June 1 $40,000

June 6 $13,320 June 6 $3,000

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 6 $13,320 June 6 $3,000

+ perform: to do an action or activity that usually requires training or skill

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

Prepaid rent Design Sales

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

Prepaid rent Design Sales

June 19 Accepts an advance fee as a deposit on a series of brochures to be designed, $1,400

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

Prepaid rent Unearned Revenue Design Sales

June 15 $9,600 June 22 $5,000

June 26 pays employees four weeks’ wages, $4,800

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

June 22 $5,000 June 26 $4,800

Prepaid rent Unearned Revenue Design Sales

Office supplies Wages expenses

June 15 $9,600 June 22 $5,000

Assets = Liabilities + Owner’s

Cash A/c payable Miller, Capital

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

June 22 $5,000 June 26 $4,800

Prepaid rent Unearned Revenue Design Sales

Office supplies Wages expenses

Office equipment Utility expenses

June 15 $9,600 June 22 $5,000

June 30 Withdraw $2,800 in cash

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600 June 30 $680

Prepaid rent Unearned Revenue Design Sales

Office supplies Wages expenses

Office equipment Utility expenses