Question

Create the following table similar to the one in Exhibit 1.9. Assets = Liabilities + Equity Cash + Accounts = Accounts + Common − Dividends + Revenues − Expenses Receivable Payable Stock Then use additions and subtractions to show the dollar effects of each transaction on individual items of the accounting equation (identify each revenue and expense type, such as commissions revenue or rent expense). a. The company completed consulting work for a client and immediately collected \(5,500 cash earned. b. The company completed commission work for a client and sent a bill for \)4,000 to be received within 30 days. c. The company paid an assistant \(1,400 cash as wages for the period. d. The company collected \)1,000 cash as partial payment for the amount owed by the client in transaction b. e. The company paid $700 cash for this period’s cleaning services

Short answer

Accounts receivables are the amount owed by the customers. The table is prepared in ‘step 2’.

Step-by-step solution

Definition of accounts receivables

Accounts receivables are defined as the amount owed by the customers in exchange for goods or services

Accounting equation table

Assets		=	Liabilities	+	Equity
Cash	AR		Accounts payable		Common stock	Dividends	Revenues	Expenses
A 5,000							5,000
Service revenue
B	4,000						4,000
	Commission revenue
C -1,400								-1,400
Wages expense
D 1,000	-1,000
E -700								-700
Cleaning expense