Increases and decreases in various types of accounts are listed below. In each case, indicate by "Dr." or "Cr." (a) whether the change in the account would be recorded as a debit or a credit and (b) whether the normal balance of the account is a debit or a credit. (a) Recorded As (b) Normal Balance (1) Increase in Capital ________ _______ (2) Increase in Drawings ________ _______ (3) Decrease in Accounts Receivable ________ _______ (4) Increase in Note Payable ________ _______ (5) Increase in Accounts Payable ________ _______ (6) Decrease in Supplies ________ _______ (7) Decrease in Salaries Expense ________ _______ (8) Increase in Accounts Receivable ________ _______ (9) Increase in Cash ________ _______ (10) Decrease in Land ________ _______
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
- Increases and decreases in various types of accounts are listed below. In each case, indicate by "Dr." or "Cr." (a) whether the change in the account would be recorded as a debit or a credit and (b) whether the normal balance of the account is a debit or a credit.
|
|
|
(a) Recorded As |
(b) Normal Balance |
|
(1) |
Increase in Capital |
________ |
_______ |
|
(2) |
Increase in Drawings |
________ |
_______ |
|
(3) |
Decrease in Accounts Receivable |
________ |
_______ |
|
(4) |
Increase in Note Payable |
________ |
_______ |
|
(5) |
Increase in Accounts Payable |
________ |
_______ |
|
(6) |
Decrease in Supplies |
________ |
_______ |
|
(7) |
Decrease in Salaries Expense |
________ |
_______ |
|
(8) |
Increase in Accounts Receivable |
________ |
_______ |
|
(9) |
Increase in Cash |
________ |
_______ |
|
(10) |
Decrease in Land |
________ |
_______ |
- All nine transactions for Homes Realty, Inc. for June, the first month of operations, are recorded in the following T accounts:
Exhibit 2-1.
Cash HR, Capital
(1) 20,000 | (3) 7,500 | (1) 20,000
(7) 6,900 | (5) 2,600 |
(9) 4,700 | (6) 5,500
| (8) 2,000
Accounts Receivable HR, Drawings
(4) 4,900 | (9) 4,700 (8) 2,000 |
| |
Supplies Fees Earned
(3) 7,500 | | (4) 4,900
| | (7) 6,900
Equipment Operating Expense
(2) 4,500 | (6) 5,500 |
| |
Accounts Payable
(5) 2,600 | (2) 4,500
|
Refer to Exhibit 2-1. Indicate the following for each debit and each credit:
|
(a) |
The type of account affected (asset, liability, Owner’s equity, drawings, revenue, or expense). |
|
(b) |
The effect on the account, using + for increase and - for decrease. |
Present your answers in the following form:
|
|
Account Debited |
Accounted Credited |
||
|
Transaction |
Type |
Effect |
Type |
Effect |
Refer to Exhibit 2-1. Prepare a
- Record the following selected transactions for March in a two-column journal, identifying each entry by letter:
|
(a) |
Received P10,000 from Swinging Gates, the owner. |
|
(b) |
Purchased equipment for P35,000, paying P10,000 in cash and giving a note payable for the remainder. |
|
(c) |
Paid P1,000 for rent for March. |
|
(d) |
Purchased P8,500 of supplies on account. |
|
(e) |
Recorded P2,500 of fees earned on account. |
|
(f) |
Received P11,000 in cash for fees earned. |
|
(g) |
Paid P200 to creditors on account. |
|
(h) |
Paid wages of P1,250. |
|
(i) |
Received P1,150 from customers on account. |
|
(j) |
Recorded drawings of P1,850. |
- Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Capital; Drawing; Professional Fees; and Operating Expenses.
|
(a) |
In the T accounts, record the following transactions of Bytes Consultant Services, Inc. for May, identifying each entry by number: |
|
|
(1) |
Stockholders invested P12,000 cash in the business. |
|
|
(2) |
Purchased supplies on account, P5,750. |
|
|
(3) |
Paid operating expenses, P5,000. |
|
|
(4) |
Billed clients for fees, P6,940. |
|
|
(5) |
Received cash from cash clients, P4,200. |
|
|
(6) |
Paid creditors on account, P1,000. |
|
|
(7) |
Received P2,600 from clients on account. |
|
|
(8) |
Paid Dividends P1,000 cash. |
|
(b) |
Prepare a trial balance as of May 31 for Bytes Consultant Services, Inc. |
|
|
|
|
(c) |
Assuming that supplies expense (which has not been recorded) amounts to P1,000 for May, determine the following: |
|
|
(1) |
Net income for the month. |
|
|
(2) |
Capital as of May 31. |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
