Financial Accounting Chapter 2 Assignment

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CHAPTER 2: Recording Process ( SWD: Lecture Review)
What is an account?
An account is an accounting record of increases and decreases in a specific asset, liability, or owner’s equity item. For example, Softbyte (the company discussed in Chapter 1) would have separate accounts for Cash, Accounts
Receivable, Accounts Payable, Service Revenue, and Salaries Expense. In its simplest form, an account consists of three parts: (1) a title, (2) a left or debit side, and (3) a right or credit side. Because the format of an account resembles the letter T, we refer to it as a T account.
Debits and Credits
The terms debit and credit are directional signals: Debit indicates left, and credit indicates right.They indicate which side of a T account a
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You may omit explanations for the transactions.
1. Purchased equipment on account for £3,000.
2. Billed customers £5,000 for services performed.
3. Made payment of £1,500 on account for equipment purchased earlier in month.
4. Collected £2,900 on customer accounts.

Class Exercise – 5
Use the information of Class Exercise – 5 to answer the following questions.
1. What is the balance in Accounts Payable at June 30, 2010?
2. What is the balance in Accounts Receivable at June 30, 2010?

Class Exercise – 6
The transactions of the Buy It Now Store are recorded in the general journal below. You are to post the journal entries to general ledger.
General Journal
____________________________________________________________________________________
Date
Account Titles
Debit Credit
____________________________________________________________________________________
2010
Aug.
5
Accounts Receivable
2,800
Service Revenue
2,800
10
Cash
3,000
Service Revenue
3,000
19
Rent Expense
1,000
Cash
1,000
25
Cash
1,400
Accounts Receivable
1,400

Class Exercise – 7
Prepare a trial balance from the ledger accounts of Attica Company as of January 31, 2010.
Accounts Payable
£ 500
Rent Expense
Accounts Receivable
2,000
Service Revenue
Cash
1,000
Supplies
Attica, Capital
2,200
Wages Expense
Attica, Drawing
1,000

£ 500
3,000
200
1,000

Class Exercise – 8
Under a double-entry system, show how the
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