{"id":193204,"date":"2025-02-19T07:26:36","date_gmt":"2025-02-19T07:26:36","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=193204"},"modified":"2025-02-19T07:26:39","modified_gmt":"2025-02-19T07:26:39","slug":"selected-transaction-of-boyoyong-an-interior-designer-in-his-first-month-of-business-are-as-follows","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/02\/19\/selected-transaction-of-boyoyong-an-interior-designer-in-his-first-month-of-business-are-as-follows\/","title":{"rendered":"Selected Transaction of Boyoyong, an interior designer, in his first month of business, are as follows"},"content":{"rendered":"\n
    \n
  1. Selected Transaction of Boyoyong, an interior designer, in his first month of business, are as follows:<\/li>\n<\/ol>\n\n\n\n

    October<\/p>\n\n\n\n

    1 Invested P50,000 cash in the business.<\/p>\n\n\n\n

    2 Purchased used car for P40,000 cash for use in the business.<\/p>\n\n\n\n

    3 Purchased supplies on Account for P5,000.<\/p>\n\n\n\n

    4 Billed customers P18,000 for services performed.<\/p>\n\n\n\n

    5 Paid P2,000 cash for advertising start of the business.<\/p>\n\n\n\n

    6 Received 7,000 cash from customers billed in October 4.<\/p>\n\n\n\n

    7 Paid creditor P3,000 cash on account.<\/p>\n\n\n\n

    8 Withdrew P5,000 cash for personal use of owner.<\/p>\n\n\n\n

    The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n

    Correct Answer:<\/h3>\n\n\n\n

    Here\u2019s a breakdown of Boyoyong\u2019s transactions and their effects on the accounting equation (Assets = Liabilities + Owner’s Equity):<\/p>\n\n\n\n

    October 1:<\/strong><\/p>\n\n\n\n

      \n
    • Transaction:<\/strong> Invested P50,000 cash in the business.<\/li>\n\n\n\n
    • Effect:<\/strong> Cash (Asset) increases by P50,000.<\/li>\n\n\n\n
    • Owner’s Equity:<\/strong> Increases by P50,000 (investment by the owner).<\/li>\n\n\n\n
    • Accounting Equation:<\/strong><\/li>\n\n\n\n
    • Assets: +P50,000 (Cash)<\/li>\n\n\n\n
    • Liabilities: 0<\/li>\n\n\n\n
    • Owner\u2019s Equity: +P50,000 (Owner\u2019s capital)<\/li>\n<\/ul>\n\n\n\n

      October 2:<\/strong><\/p>\n\n\n\n

        \n
      • Transaction:<\/strong> Purchased used car for P40,000 cash for use in the business.<\/li>\n\n\n\n
      • Effect:<\/strong> Cash (Asset) decreases by P40,000.<\/li>\n\n\n\n
      • Car (Asset):<\/strong> Increases by P40,000.<\/li>\n\n\n\n
      • Accounting Equation:<\/strong><\/li>\n\n\n\n
      • Assets: Cash -P40,000, Car +P40,000<\/li>\n\n\n\n
      • Liabilities: 0<\/li>\n\n\n\n
      • Owner\u2019s Equity: 0 (No change)<\/li>\n<\/ul>\n\n\n\n

        October 3:<\/strong><\/p>\n\n\n\n

          \n
        • Transaction:<\/strong> Purchased supplies on account for P5,000.<\/li>\n\n\n\n
        • Effect:<\/strong> Supplies (Asset) increase by P5,000.<\/li>\n\n\n\n
        • Accounts Payable (Liabilities):<\/strong> Increase by P5,000.<\/li>\n\n\n\n
        • Accounting Equation:<\/strong><\/li>\n\n\n\n
        • Assets: +P5,000 (Supplies)<\/li>\n\n\n\n
        • Liabilities: +P5,000 (Accounts Payable)<\/li>\n\n\n\n
        • Owner\u2019s Equity: 0 (No change)<\/li>\n<\/ul>\n\n\n\n

          October 4:<\/strong><\/p>\n\n\n\n

            \n
          • Transaction:<\/strong> Billed customers P18,000 for services performed.<\/li>\n\n\n\n
          • Effect:<\/strong> Accounts Receivable (Asset) increase by P18,000.<\/li>\n\n\n\n
          • Revenue (Owner\u2019s Equity):<\/strong> Increases by P18,000.<\/li>\n\n\n\n
          • Accounting Equation:<\/strong><\/li>\n\n\n\n
          • Assets: +P18,000 (Accounts Receivable)<\/li>\n\n\n\n
          • Liabilities: 0<\/li>\n\n\n\n
          • Owner\u2019s Equity: +P18,000 (Revenue)<\/li>\n<\/ul>\n\n\n\n

            October 5:<\/strong><\/p>\n\n\n\n

              \n
            • Transaction:<\/strong> Paid P2,000 cash for advertising.<\/li>\n\n\n\n
            • Effect:<\/strong> Cash (Asset) decreases by P2,000.<\/li>\n\n\n\n
            • Expenses (Owner\u2019s Equity):<\/strong> Decreases by P2,000.<\/li>\n\n\n\n
            • Accounting Equation:<\/strong><\/li>\n\n\n\n
            • Assets: Cash -P2,000<\/li>\n\n\n\n
            • Liabilities: 0<\/li>\n\n\n\n
            • Owner\u2019s Equity: -P2,000 (Expenses)<\/li>\n<\/ul>\n\n\n\n

              October 6:<\/strong><\/p>\n\n\n\n

                \n
              • Transaction:<\/strong> Received P7,000 cash from customers billed on October 4.<\/li>\n\n\n\n
              • Effect:<\/strong> Cash (Asset) increases by P7,000.<\/li>\n\n\n\n
              • Accounts Receivable (Asset):<\/strong> Decreases by P7,000.<\/li>\n\n\n\n
              • Accounting Equation:<\/strong><\/li>\n\n\n\n
              • Assets: Cash +P7,000, Accounts Receivable -P7,000<\/li>\n\n\n\n
              • Liabilities: 0<\/li>\n\n\n\n
              • Owner\u2019s Equity: 0 (No change)<\/li>\n<\/ul>\n\n\n\n

                October 7:<\/strong><\/p>\n\n\n\n

                  \n
                • Transaction:<\/strong> Paid creditor P3,000 cash on account.<\/li>\n\n\n\n
                • Effect:<\/strong> Cash (Asset) decreases by P3,000.<\/li>\n\n\n\n
                • Accounts Payable (Liabilities):<\/strong> Decreases by P3,000.<\/li>\n\n\n\n
                • Accounting Equation:<\/strong><\/li>\n\n\n\n
                • Assets: Cash -P3,000<\/li>\n\n\n\n
                • Liabilities: Accounts Payable -P3,000<\/li>\n\n\n\n
                • Owner\u2019s Equity: 0 (No change)<\/li>\n<\/ul>\n\n\n\n

                  October 8:<\/strong><\/p>\n\n\n\n

                    \n
                  • Transaction:<\/strong> Withdrew P5,000 cash for personal use.<\/li>\n\n\n\n
                  • Effect:<\/strong> Cash (Asset) decreases by P5,000.<\/li>\n\n\n\n
                  • Owner\u2019s Equity:<\/strong> Decreases by P5,000 (Owner’s withdrawal).<\/li>\n\n\n\n
                  • Accounting Equation:<\/strong><\/li>\n\n\n\n
                  • Assets: Cash -P5,000<\/li>\n\n\n\n
                  • Liabilities: 0<\/li>\n\n\n\n
                  • Owner\u2019s Equity: -P5,000 (Owner\u2019s withdrawal)<\/li>\n<\/ul>\n\n\n\n

                    Explanation:<\/h3>\n\n\n\n

                    In each transaction, the accounting equation (Assets = Liabilities + Owner\u2019s Equity) must remain in balance. When an asset is increased or decreased, the accounting equation is adjusted accordingly. For example:<\/p>\n\n\n\n

                      \n
                    • Investing cash<\/strong> increases both assets (cash) and the owner\u2019s equity (capital).<\/li>\n\n\n\n
                    • Purchasing a car<\/strong> reduces cash but increases an asset (the car).<\/li>\n\n\n\n
                    • Purchasing supplies on account<\/strong> increases assets (supplies) and liabilities (accounts payable).<\/li>\n\n\n\n
                    • Billing customers<\/strong> creates revenue, increasing assets (accounts receivable) and owner\u2019s equity.<\/li>\n\n\n\n
                    • Paying for advertising<\/strong> decreases cash and decreases owner\u2019s equity due to the expense.<\/li>\n\n\n\n
                    • Receiving cash from customers<\/strong> shifts amounts between assets (accounts receivable and cash).<\/li>\n\n\n\n
                    • Paying creditors<\/strong> reduces both cash and liabilities.<\/li>\n\n\n\n
                    • Owner\u2019s withdrawal<\/strong> decreases cash and reduces owner\u2019s equity.<\/li>\n<\/ul>\n\n\n\n

                      This shows how the business activities affect the accounting equation, ensuring that the financial records are in balance and that the business\u2019s financial position is accurately reflected.<\/p>\n","protected":false},"excerpt":{"rendered":"

                      October 1 Invested P50,000 cash in the business. 2 Purchased used car for P40,000 cash for use in the business. 3 Purchased supplies on Account for P5,000. 4 Billed customers P18,000 for services performed. 5 Paid P2,000 cash for advertising start of the business. 6 Received 7,000 cash from customers billed in October 4. 7 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-193204","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/193204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=193204"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/193204\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=193204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=193204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=193204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}