Concept explainers
(a)
Journal:
Journal is the book of original entry. Journal consists of the day-to-day financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
Rules of debit and credit:
“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.
Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.
To Journalize: The transaction occurred on January 7, 2016.
(b), (c) and (d)
To prepare: A four- column account for supplies.
(d)
To explain: Whether the rules of debit and credit apply to all companies.
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Chapter 2 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
- Prepare journal entries to record the following transactions. Create a T-account for Accounts Payable, post any entries that affect the account, and calculate the ending balance for the account. Assume an Accounts Payable beginning balance of $7,500. A. May 12, purchased merchandise inventory on account. $9,200 B. June 10, paid creditor for part of previous months purchase, $11,350arrow_forwardJournalizing and posting On February 11, 20Y9, Quick Fix Company purchased 2,250 of supplies on account. In Quick Fixs chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. a. Journalize the February 11, 20Y9, transaction on page 73 of Quick Fix Companys two-column journal. Include an explanation of the entry. b. Prepare a four-column account for Supplies. Enter a debit balance of 400 as of February 1, 20Y9. Place a check mark () in the Posting Reference column. c. Prepare a four-column account for Accounts Payable. Enter a credit balance of 18,300 as of February 1, 20Y9. Place a check mark () in the Posting Reference column. d. Post the February 11, 20Y9, transaction to the accounts. e. Do the rules of debit and credit apply to all companies?arrow_forwardPrepare the entries for transaction below and indicate what journal it is 19 august sold merchandize that cost $3600 to ultracity co. For $5000 under the credit terms of 3/15, n/60, FOBarrow_forward
- Prepare journal entries to record the following transactions. Create a T-account for AccountsPayable, post any entries that affect the account, and calculate the ending balance for the account. Assume anAccounts Payable beginning balance of $7,500.A. May 12, purchased merchandise inventory on account. $9,200B. June 10, paid creditor for part of previous month’s purchase, $11,350arrow_forwardPrepare Journal Entries in a Purchases Journal Fernandez Services Inc. had the following transactions during the month of April: Apr. 4. Purchased office supplies from Officemate Inc. on account, $640. Apr. 9. Purchased office equipment on account from Tek Village Inc., $2,530. Apr. 16. Purchased office supplies from Officemate Inc. on account, $170. Apr. 19. Purchased office supplies from Paper-to-Go Inc. on account, $260. Apr. 27. Paid invoice on April 4 purchase from Officemate Inc. a. Prepare a purchases journal to record the April purchase transactions for Fernandez Services Inc. If an amount box does not require an entry, leave it blank. If no entry is required in "Other Accounts Dr." then select "No entry required". PURCHASES JOURNAL DATE Account Credited Post. Ref. Accounts Payable Cr. Office Supplies Dr. Other Accounts Dr. Post. Ref. Amount Apr. 4 Apr. 9 Apr. 16 Apr. 19 Apr. 30 Total b. What is the total amount posted to the accounts payable and office supplies accounts from…arrow_forward2. Record the transactions in the purchases journal, post entries from the purchases journal to the accounts payable subsidiary ledger, post the purchases journal to the general ledger, prepare the schedule of accounts payable. Transactions from XYZ trading company for the month of January 2016 are listed below: Jan. 02: Purchased merchandise on account from S & Co. for $900, invoice No. 105 Jan. 06: Purchased merchandise on account from A & Co. for $3,200, invoice No. 240 Jan. 08: Purchased merchandise on account from Z Brothers for $360, invoice No. 115 Jan. 15: Purchased merchandise on account from S & Co for $800, invoice No. 305 Jan. 25: Purchased merchandise on account from S & Co for $700, invoice No. 395 Jan. 31: Purchased merchandise on account from Z Brothers for $300, invoice No. 345arrow_forward
- You are to enter up the sales, purchases and the returns inwards and returns outwards journals/day books from the following details, then the total of the journals are then to be transferred to the relevant accounts in the general ledger. 2018 May “ “ “ “ “ “ “ “ “ “ “ 1 3 7 9 11 14 17 20 24 28 31 Credit sales: T Thompson £56; L Rodriquez £148; K Barton £145 Credit purchases: P Potter £144; H Harris £25; B Spencer £76 Credit sales: K Kelly £89; N Mendes £78; N Lee £257 Credit Purchases: B Perkins £24; H Harris £58; H Miles £123 Goods returned by us to: P Potter £12; B Spencer £22 Goods returned to us by: T Thompson £5; K Barton £11;K Kelly £14 Credit purchases: H Harris £54; B Perkins £65: L Nixon £75. Goods returned by us to B Spencer £14 Credit sales: K Mohammed £57; K Kelly £65; O Green £112 Goods returned to us by N Mendes £24 Credit sales: N Lee £55arrow_forwardOn February 11, 20Y9, Quick Fix Company purchased $2,000 of supplies on account. In Quick Fix's chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. a. Journalize and insert the posting reference for the February 11, 20Y9, transaction on page 73 of Quick Fix Company's two-column journal. If an amount box does not require an entry, leave it blank. Page: 73 DATE 1 2/11/20Y9 2 Account Supplies DATE 2/1/20Y9 2/11/20Y9 ACCOUNT TITLE b. & d. Enter a debit balance of $960 as of February 1, 20Y9. Place a check mark (✓) in the Posting Reference column. Post and insert the posting reference for the February 11, 20Y9, transaction to the account. If an amount box does not require an entry, leave it blank. GENERAL LEDGER DATE 2/1/20Y9 ITEM Account Accounts Payable 2/11/20Y9 Balance ITEM POST. REF. Balance POST. REF. POST. REF. DEBIT c. & d. Enter a credit balance of $14,240 as of February 1, 20Y9. Place a check mark (✓) in the Posting Reference column. Post…arrow_forwardPrepare Journal Entries in a Purchases Journal Guardian Services Inc. had the following transactions during the month of April: Apr. 4. Purchased office supplies from Officemate, Inc. on account, $390. Apr. 9. Purchased office equipment, Inc. on account from Tek Village Inc., $1,540. Apr. 16. Purchased office supplies from Officemate, Inc. on account, $110. Apr. 19. Purchased office supplies from Paper-to-Go Inc. on account, $160. Apr. 27. Paid invoice on April 4 purchase from Officemate, Inc. a. Prepare a purchases journal to record the April purchase transactions for Guardian Services Inc. If an amount box does not require an entry, leave it blank. If no entry is required in "Other Accounts Dr." then select "No entry required". PURCHASES JOURNAL DATE Account Credited Post. Ref. Accounts Payable Cr. Office Supplies Dr. Other Accounts Dr. Post. Ref. Amount Apr. 4 Apr. 9 Apr. 16 Apr. 19 Apr. 30…arrow_forward
- Schrand Corporation purchase materials from a that offers credit terms of /supplier, n It purchased $12,500 of merchandized inventory from the supplier on Jan. 20, 2016.a. Assume Schrand paid the invoice on February 15,2016. Prepare a journal entry to record the purchase of this inventory and the cash payment to the supplier using the net of discount method.b. Set up the necessary T accounts and post the journal entries from question a to the accounts.c. Compute the cost of a lost discount as an annual percentage rate.arrow_forwardPrepare the entries for transaction below and indicate what journal it is 21 august issued a $600 credit memo to ultracity co. For an allowance on good sold on august 19, 2020arrow_forwardWhat is the journal entry for the following transactions A. Directions: Bean Company established by Mr. Bean himself begun business on September 1, 2016. Selected transaction for September related to its merchandising businesses are given below. Assuming you are the bookkeeper of bean Company record the forgoing transactions. September 1 Mr. Bean withdrew P1,000,000 from his personal savings account and deposited it under the account of Bean Company 5 Purchased merchandise from Menggay Company. List price was P60,000 with terms of 10-5, 2/10, n/60 FOB shipping point freight prepaid P2,000 6 Returned defective merchandise to Menggay Company P1,000 12 Bont Trading settled its account in fullarrow_forward
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
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