Event No. 12. On August 14, 20X6, Huske's Consultants paid the $400 owed to the local supply company (see Event No. 2). The cash payment acts to decrease assets (Cash) and liabilities (Accounts Payable). The decrease in assets is recorded as a credit, and the decrease in liabilities is recorded as a debit:

Illustration 24: Effect of cash payment on account in T accounts

This is an asset use transaction:

Illustration 25: Effect of cash payment on account in the horizontal model

Event No. 13. On September 18, 20X6 Huske's Consultants received $800 bill from SuperCleaners for cleaning the office. Mrs. Huske plans to pay the bill later. The event acts to increase liabilities and decrease equity. The increase in liabilities (Accounts Payable) is recorded as a credit, and the decrease in equity (Office Maintenance Expense) is recorded as a debit:

Illustration 26: Effect of cleaning services on account in T accounts

This is a claims exchange transaction:

Illustration 4-27: Effect of cleaning services on account in the horizontal model

Event No. 14. On November 31, 20X6 Huske's Consultants distributed $300 in cash to the owner. The distribution acts to decrease assets and equity. The decrease in assets (Cash) is recorded as a credit, and the decrease in equity (Distribution) is recorded as a debit:

Illustration 28: Effect of cash distribution in T accounts

This is an asset use transaction:

Illustration 29: Effect of cash distribution in the horizontal model