00:01
In this example, we're going to be talking about the impact to the accounting equation given various transactions, whether assets and liabilities would go up or down.
00:13
We opened a business bank account with a deposit of $28 ,000.
00:19
That means we got cash.
00:22
So my cash, which is an asset, increases $28 ,000.
00:27
When we deposit money for business use, we're increasing our capital, which will be.
00:32
Belongs in stockholders ' equity, $28 ,000.
00:41
Paid rent on office equipment for the month.
00:46
If we paid something, it means our cash went down.
00:50
Cash down $3 ,600.
00:54
We would have also had rent expense.
00:57
Remember that expenses lower stockholders ' equity.
01:02
It would lower it by $3 ,600.
01:07
Paid automobile expenses for the month, 1 ,300 and miscellaneous expenses 700.
01:16
Again, expenses lower equity.
01:19
So we'd have auto expense of 1 ,300, which would decrease equity, and miscellaneous expense of 700.
01:29
It says we paid this amount, so my cash, which is an asset, would go down by the total.
01:39
Purchased office supplies on account...