| Course | AC112 Accounting Fundamentals for Management |
|---|---|
| Unit | Unit 2 |
| Paper type | Transaction analysis exercise |
| Length | About 740 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC112 Unit 2
Eleven Events, One Equation: A Unit 2 Transaction Analysis for a Dog Grooming Salon's First Month
[Student Name]
Purdue University Global
AC112: Accounting Fundamentals for Management
Unit 2 Transaction Analysis Exercise
[Instructor Name]
[Date]
The salon, its owner and every amount are composite; the open textbook, the FASB framework and the study of double entry's origins are real.
The Equation
Assets equal liabilities plus owner's equity. Equity rises with owner investment and revenue and falls with expenses and owner withdrawals (Franklin et al., 2019). Accounts used: Cash, Accounts Receivable, Supplies, Prepaid Insurance and Equipment on the asset side; Accounts Payable and Notes Payable as liabilities; and Capital, Withdrawals, Revenue and Expenses within equity.
The Events, Row by Row
a. Renata, the owner, deposits $30,000 of her savings in the salon's account. Cash rises $30,000; Capital rises $30,000. Running totals: assets $30,000; liabilities $0; equity $30,000.
b. Grooming tubs, tables and dryers cost $18,000: $6,000 in cash and a $12,000 note to the supplier. Equipment rises $18,000; Cash falls $6,000; Notes Payable rises $12,000. Assets $42,000 equal liabilities $12,000 plus equity $30,000.
c. A twelve-month liability insurance policy is paid in advance, $2,400. Prepaid Insurance rises $2,400; Cash falls $2,400. Totals unchanged at $42,000.
d. Shampoo, clipper blades and towels are bought on account, $1,500. Supplies rise $1,500; Accounts Payable rises $1,500. Assets $43,500 equal liabilities $13,500 plus equity $30,000.
e. Walk-in and booked grooms paid at pickup bring in $7,800. Cash rises $7,800; Revenue rises $7,800. Assets $51,300 equal liabilities $13,500 plus equity $37,800.
f. Grooming for a boarding kennel's guests is billed on account, $2,600. Accounts Receivable rises $2,600; Revenue rises $2,600. Assets $53,900 equal liabilities $13,500 plus equity $40,400.
g. The kennel pays $1,600 of its bill. Cash rises $1,600; Accounts Receivable falls $1,600. Totals unchanged at $53,900.
h. Groomers' wages for the month are paid, $3,900. Cash falls $3,900; Expenses rise $3,900, reducing equity. Assets $50,000 equal liabilities $13,500 plus equity $36,500.
i. March rent is paid, $2,200. Cash falls $2,200; Expenses rise $2,200. Assets $47,800 equal liabilities $13,500 plus equity $34,300.
j. $900 is paid to the supply vendor on account. Cash falls $900; Accounts Payable falls $900. Assets $46,900 equal liabilities $12,600 plus equity $34,300.
k. Renata withdraws $1,500 for personal use. Cash falls $1,500; Withdrawals rise $1,500, reducing equity. Assets $45,400 equal liabilities $12,600 plus equity $32,800.
Ending Balances and Proof
1. Cash: $30,000 minus $6,000, minus $2,400, plus $7,800, plus $1,600, minus $3,900, minus $2,200, minus $900, minus $1,500 equals $22,500.
2. The kennel still owes $1,000; the supply shelf is carried at $1,500, the unused policy at $2,400 and the grooming equipment at $18,000.
3. Total assets: $45,400.
4. Accounts Payable $600; Notes Payable $12,000; total liabilities $12,600.
5. Equity: Capital $30,000, less Withdrawals $1,500, plus Revenue $10,400, less Expenses $6,100, equals $32,800.
6. Liabilities plus equity: $12,600 plus $32,800 equals $45,400, the same as total assets.
What the Events Did to the Owner's Claim
Only five of the eleven events changed Renata's claim on the salon at all, and only three of those, the two kinds of grooming revenue and the expenses, came from running the business.
Her investment raised her claim and her withdrawal lowered it, but neither was earned or spent in the course of grooming dogs. Revenue of $10,400 and expenses of $6,100 left $4,300 of claim created by operations, before any adjustment for insurance used, supplies consumed or equipment wearing out. The other six events only exchanged one asset for another or matched an asset with a debt. Buying equipment on a note, for example, made the salon larger without making Renata any richer. A manager reading the equation sees at once that a month with a large cash balance, $22,500 here, is not the same as a month with a large profit.
Why Equal Totals Are Not the Whole Proof
Every row balances because each event was recorded with two equal effects, which is the logic double entry has carried since it was first described in fifteenth-century Italy (Sangster, 2016). Balancing shows the arithmetic is internally consistent; it does not show the right accounts were used. Had the equipment been recorded as an expense, the equation would still balance while equity would be understated by $18,000. A user of financial information needs it to represent the events faithfully, not only to add up (Financial Accounting Standards Board, 2018).
References
Financial Accounting Standards Board. (2018). Conceptual framework for financial reporting: Chapter 1, The objective of general purpose financial reporting, and Chapter 3, Qualitative characteristics of useful financial information (Statement of Financial Accounting Concepts No. 8, as amended). https://www.fasb.org
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting
Sangster, A. (2016). The genesis of double entry bookkeeping. The Accounting Review, 91(1), 299-315. https://doi.org/10.2308/accr-51115
What the AC112 Unit 2 assignment asks for
In the second AC112 unit, students receive a list of business events and analyze each one's effect on the accounting equation. Show every event as a row with the accounts affected and the amounts, signed up or down. Prove that assets equal liabilities plus equity after each event, not only at the end. Group equity changes into investment, withdrawals, revenue and expenses so the owner's claim can be read. After the analysis, the prompt usually asks for a short interpretation of what the events did. Many sections expect the equation format alone, with journal entries coming later. Keep labels consistent with the chart of accounts the problem supplies. A one- to two-page worksheet is typical. Cite the textbook where you explain the rules, in APA 7.
How the AC 112 Unit 2 example is put together
The sample states the equation and the accounts used, then takes events a to k one at a time. Each row names the event, the accounts that change and the running totals of assets, liabilities and equity. The owner's investment, the equipment bought with cash and a note, the prepaid policy, supplies on account, cash and credit grooming, a partial collection, wages, rent, a payment to the vendor and an owner withdrawal all appear. A numbered list proves the ending balances, $45,400 of assets against $12,600 of liabilities and $32,800 of equity. The highlighted sentence observes that only five events changed the owner's claim. A final section explains, with a recorded-as-expense example, why balancing does not prove accuracy.
Where the points sit in the AC112 Unit 2 rubric
Transaction analysis is marked mainly on accuracy: the right accounts, the right direction and the right amounts for every event. The rubric usually checks that the equation balances throughout, so running totals help a grader confirm the work. Correctly treating owner withdrawals as a reduction of equity, not an expense, is a frequent scoring point. Prepaid items recorded as assets rather than expenses earn credit. The interpretation paragraph often carries separate points in AC112, because the course is aimed at managers. Labels and layout matter, since a grader must be able to follow each row. Citations to course materials support the explanation. Clean formatting and APA 7 references complete the marks.
AC112 Unit 2 help from the desk
The most common transaction errors are treating an owner withdrawal as an expense and recording a prepaid policy as an expense on the day it is bought. Equipment bought partly on credit is sometimes recorded only for the cash paid. Credit sales are occasionally left out of revenue until collected. Some students balance only at the end, which hides where an error crept in. The interpretation is often skipped or reduced to a sentence. Account names drift between rows. If your event list is in front of you but the totals keep failing to agree, a writer can work through the analysis row by row with you.
Get an AC112 Unit 2 example written to your instructions
Upload the event list your AC112 section assigned for Unit 2, plus its instructions and rubric, and the equation grid is worked on those exact amounts. There is no charge for the first custom sample, and it arrives inside 24-48h with every running balance shown so a mismatch in your own attempt is easy to locate. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More AC112 papers and BS in Accounting samples
- AC112 Unit 1: Why Managers Read Entries Post
- AC112 Unit 3: Trial Balance Problem
- AC112 Unit 4: Adjusting Entries Set
- AC112 Unit 5: Financial Statement Preparation
- AC112 Unit 6: Cash Flow Discussion
- AC112 Unit 7: Ratio Interpretation Memo
- AC112 Unit 8: Seminar Reflection
- AC112 Unit 9: Budget Schedule
- AC112 Unit 10: Management Report
AC112 Unit 2 questions, answered
Does this exercise need journal entries or only the equation table?
In most AC112 sections, Unit 2 is the equation table alone, with entries arriving a unit or two later. Some instructors do ask for both, and a sample built to that version places the entry for each event directly beside its row. Read the prompt for the word journalize; if it is absent, the grid and the interpretation are the whole deliverable.
My totals agree but my instructor still took points. How?
Equal totals only prove the arithmetic balanced. A cash purchase of equipment recorded as an expense still balances, because both sides fell by the same amount, yet it misstates what the business owns. Graders compare each cell to the key, so a correct final line can sit above several wrong rows. The running balances usually show which event went astray.
Why is a withdrawal by the owner not an expense?
An expense is a cost of earning revenue, such as wages or rent. When the owner takes cash out for personal use, the business earns nothing in return; the owner simply holds a smaller claim on its assets. The equation shows this as a reduction in equity through a separate withdrawals column, which keeps the profit figure honest for anyone reading it later.
Where can I find a free AC112 Unit 2 sample paper?
You can read a complete AC112 Unit 2 transaction analysis exercise on this page, taking eleven events at a dog grooming salon through the accounting equation with running totals and an interpretation.
Which events changed the owner's equity in the AC112 Unit 2 sample?
Five did: the owner's $30,000 investment, cash grooming revenue, grooming billed on account, wages and rent paid, and the owner's withdrawal. The other events exchanged assets or matched an asset with a debt.