Chapter 10, Problem 8SEA

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Chapter
Section

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

# JOURNALIZING CASH RECEIPTS Enter the following transactions in a general journal:

To determine

Journalize the transactions related to cash receipts.

Explanation

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

• Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholdersâ€™ equity accounts.
• Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholdersâ€™ equity accounts.

Journalize the transactions related to cash receipts.

Transaction on July 6:

 Date Account Titles and Explanations Post. Ref. Debit (\$) Credit (\$) July 6 Cash Â 643 Â Â Â Â Accounts Receivable, JA Â Â 643 Â Â (Record cash received for sales on account) Â Â Â

Table (1)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Accounts Receivable, JA is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

Transaction on July 10:

 Date Account Titles and Explanations Post. Ref. Debit (\$) Credit (\$) July 10 Cash Â 2,320 Â Â Â Â Sales Â Â 2,320 Â Â (Record cash received from cash sales) Â Â Â

Table (2)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.

Transaction on July 14:

 Date Account Titles and Explanations Post. Ref. Debit (\$) Credit (\$) July 14 Cash Â 430 Â Â Â Â Accounts Receivable, BH Â Â 430 Â Â (Record cash received for sales on account) Â Â Â

Table (3)

Description:

• Cash is an asset account...

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