1. Chapter 3 The Equation Analysis Sheet
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

2. Source Documents and the Objectivity Principle
Accounting entries are made from business papers known as
Source documents are kept on file for reference purposes and as proof of transactions
The Objectivity Principle
A business’s accounting must be recorded
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3. Figure 3.1: Metropolitan Movers Balance Sheet
PowerPoint 3– Chapter 3
Figure 3.1: Metropolitan Movers Balance Sheet 3

4. Transactions for Metropolitan Movers
PowerPoint 3–2 (part 1) Chapter 3
Transactions for Metropolitan Movers
Transaction 1
Metropolitan Movers pays $1200 cash to reduce the
Bank Loan.
Transaction 2
K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Transaction 3
Equipment costing $1950 is purchased for cash.
Transaction 4
A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price. 4

5. Transactions for Metropolitan Movers
PowerPoint 3–2 (part 2) Chapter 3
Transactions for Metropolitan Movers
Transaction 5
Metropolitan Movers completes a storage service for
B. Cava at a price of $1500. A bill is sent to Cava to indicate the additional amount that is owed.
Transaction 6
J. Hofner, the owner, withdraws $500 for personal use.
Transaction 7
One of the trucks requires an engine adjustment costing $375. The repair is paid for in cash when the truck is picked up. 5

6. The Equation Analysis Sheet Write down the fundamental accounting equation and list the items in the assets, liabilities, and owner’s equity sections.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

7. The Equation Analysis Sheet Record the initial balances from a balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

8. The Equation Analysis Sheet Record the initial balances from a balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

9. The Equation Analysis Sheet Record the initial balances from a balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

10. The Equation Analysis Sheet Record the initial balances from a balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

11. The Equation Analysis Sheet Record the initial balances from a balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

12. The Equation Analysis Sheet Begin recording the transactions.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

13. The Equation Analysis Sheet Transaction 1: Metropolitan Movers pays $1200 cash to reduce the Bank Loan.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

14. Record changes to the appropriate accounts.
The Equation Analysis Sheet Transaction 1: Metropolitan Movers pays $1200 cash to reduce the Bank Loan.
Record changes to the appropriate accounts.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

15. Record changes to the appropriate accounts.
The Equation Analysis Sheet Transaction 1: Metropolitan Movers pays $1200 cash to reduce the Bank Loan.
Record changes to the appropriate accounts.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

16. Record changes to the appropriate accounts.
The Equation Analysis Sheet Transaction 1: Metropolitan Movers pays $1200 cash to reduce the Bank Loan.
Record changes to the appropriate accounts.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

17. The Equation Analysis Sheet Transaction 1: Metropolitan Movers pays $1200 cash to reduce the Bank Loan.
Record the new balances.
Make sure the equation still balances.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

18. The Equation Analysis Sheet Transaction 2: K
The Equation Analysis Sheet Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

19. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

20. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

21. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

22. The Equation Analysis Sheet Transaction 2: K
The Equation Analysis Sheet Transaction 2: K. Lincoln, who owes Metropolitan Movers $2500, pays $1100 in partial payment of the debt.
Record the new balances.
Make sure the equation still balances.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

23. The Equation Analysis Sheet Transaction 3: Equipment costing $1950 is purchased for cash.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

24. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

25. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

26. Record changes to the appropriate items.
The Equation Analysis Sheet Transaction 3: Equipment costing $1950 is purchased for cash.
Record changes to the appropriate items.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

27. The Equation Analysis Sheet Transaction 3: Equipment costing $1950 is purchased for cash.
Record the new balances.
Make sure the equation still balances.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

28. The Equation Analysis Sheet Transaction 4: A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

29. The Equation Analysis Sheet Transaction 4: A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

30. The Equation Analysis Sheet Transaction 4: A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

31. The Equation Analysis Sheet Transaction 4: A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price.
Chapter 3 – The Equation Analysis Sheet | Accounting 1, 7th Edition

32. The Equation Analysis Sheet Transaction 4: A pick-up truck is purchased at a cost of $ Metropolitan Movers pays $ cash and arranges a loan from its bank to cover the balance of the purchase price.
Chapter 3 – The Equation Analysis Sheet | Accounting 1, 7th Edition

33. The Equation Analysis Sheet Transaction 5: Metropolitan Movers completes a storage service for B. Cava at a price of $1500. A bill is sent to Cava to indicate the additional amount that is owed.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

34. The Equation Analysis Sheet Transaction 5: Metropolitan Movers completes a storage service for B. Cava at a price of $1500. A bill is sent to Cava to indicate the additional amount that is owed.
Chapter 3 – The Equation Analysis Sheet | Accounting 1, 7th Edition

35. The Equation Analysis Sheet Transaction 5: Metropolitan Movers completes a storage service for B. Cava at a price of $1500. A bill is sent to Cava to indicate the additional amount that is owed.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

36. The Equation Analysis Sheet Transaction 5: Metropolitan Movers completes a storage service for B. Cava at a price of $1500. A bill is sent to Cava to indicate the additional amount that is owed.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

37. The Equation Analysis Sheet Transaction 6: J
The Equation Analysis Sheet Transaction 6: J. Hofner, the owner, withdraws $500 for personal use.
Chapter 3 – The Equation Analysis Sheet | Accounting 1, 7th Edition

38. The Equation Analysis Sheet Transaction 6: J
The Equation Analysis Sheet Transaction 6: J. Hofner, the owner, withdraws $500 for personal use.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

39. The Equation Analysis Sheet Transaction 6: J
The Equation Analysis Sheet Transaction 6: J. Hofner, the owner, withdraws $500 for personal use.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

40. The Equation Analysis Sheet Transaction 6: J
The Equation Analysis Sheet Transaction 6: J. Hofner, the owner, withdraws $500 for personal use.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

41. The Equation Analysis Sheet Transaction 7: One of the trucks requires an engine adjustment costing $375. The repair is paid for in cash when the truck is picked up.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

42. The Equation Analysis Sheet Transaction 7: One of the trucks requires an engine adjustment costing $375. The repair is paid for in cash when the truck is picked up.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

43. The Equation Analysis Sheet Transaction 7: One of the trucks requires an engine adjustment costing $375. The repair is paid for in cash when the truck is picked up.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

44. The Equation Analysis Sheet Transaction 7: One of the trucks requires an engine adjustment costing $375. The repair is paid for in cash when the truck is picked up.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

45. The Equation Analysis Sheet Final balances from the equation analysis sheet can be used to create an updated balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

46. The Equation Analysis Sheet Final balances from the equation analysis sheet can be used to create an updated balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

47. The Equation Analysis Sheet Final balances from the equation analysis sheet can be used to create an updated balance sheet.
Chapter 3 – The Equation Analysis Sheet l Accounting 1, 7th Edition

48. The Equation Analysis Sheet Exercise
Please complete exercise 1 & 2 on page 78/79 and exercise 7 on page 81 in your textbook. Feel free to work with a partner!
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