基础会计学Chap001.ppt

In transaction number 3, FastForward spends $26,000 to acquire equipment for testing footwear. This is an exchange of one asset, cash, for another asset, equipment. The equipment is an asset because of its expected future benefits from testing footwear. This purchase changes the makeup of assets but does not change the asset total. In transaction number 4, FastForward decides more supplies of footwear and accessories are needed. These additional supplies total $7,100, but as we see from the accounting equation, FastForward has only $1,500 in cash. Taylor arranges to purchase them on credit from CalTech Supply Company. FastForward acquires supplies in exchange for a promise to pay for them later. This purchase increases assets by $7,100 in supplies, and liabilities (called accounts payable to CalTech Supply) increase by the same amount. This purchase changes the makeup of assets but does not change the asset total. In transaction number 5, FastForward provides consulting services to a powerwalking club and immediately collects $4,200 cash. The accounting equation reflects this increase in cash of $4,200 and in equity of $4,200. This increase in equity is identified in the far right column under Revenues because the cash received is earned by providing consulting services. It earns net income only if its revenues are greater than its expenses incurred in earning them. In transaction 6 and 7, FastForward pays $1,000 rent to the landlord of the building where its facilities are located. Paying this amount allows FastForward to occupy the space for the month of December. In addition, the company pays the biweekly $700 salary of the company’s only employee. The costs of both rent and salary are expenses, as opposed to assets, because their benefits are used in December (they have no future benefits after December). These transactions also use up an asset (cash). By definition, increases in expenses yield decreases in equity. This can be seen in the accounting equ