College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 2A
What Would You Say?
A fellow accounting student has difficulty understanding how the fundamental
This means that there are two credits and one debit—one debit and one credit on the left side of the equation and the other credit on the right side of the equation. Explain to your fellow student how the equation stays in balance.
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Jetson Corp. performed services for a customer worth $500 and the customer will pay for those services next month.
When the transaction was journalized, however, Jetson's accountant debited the "Cash" account and credited the "Service Revenue" account for $500 each.
Question: As a result of this error, which of the following statements is/are true? (check all that apply)
Select one or more:
a.
Total debits and total credits will still equal but the balance sheet equation will not be satisfied.
b.
Total debits and total credits will still equal and the balance sheet equation will be satisfied.
c.
The "Accounts Receivable" account balance will be too low (understated) while the "Cash" account balance will be too high (overstated).
d.
The "Accounts Receivable" account balance will be too low (understated) while the "Service Revenue" account balance will be too high (overstated).
1. Suppose a business receives a bill for services rendered from one of itssuppliers. The business will pay the supplier next month. When the businessreceives the bill from its supplier, explain how this affect the accounting equation in terms of increasing or decreasing assets, liabilities, or owner’s equity?
2. Suppose equipment is sold for cash in an amount equal to the cost of theequipment recorded on the books. How does this sale affect the accountingequation in term of increasing or decreasing assets, liabilities or owner’s equity?
Chapter 2 Solutions
College Accounting (Book Only): A Career Approach
Ch. 2 - Determine the balance of the following T account:
...Ch. 2 - Which of the following statements is correct? a....Ch. 2 - Prob. 3QYCh. 2 - R. Nelson invests his personal computer, with a...Ch. 2 - When preparing a trial balance, which of the...Ch. 2 - What would be the net income for Floress Catering?...Ch. 2 - On which financial statement(s) would R. Flores,...Ch. 2 - What is the amount of ending capital shown on the...Ch. 2 - Floress Catering purchased equipment that cost...Ch. 2 - Prob. 1DQ
Ch. 2 - Explain why the term debit doesnt always mean...Ch. 2 - Prob. 3DQCh. 2 - How are the three financial statements shown in...Ch. 2 - Prob. 5DQCh. 2 - List two reasons why the debits and credits in the...Ch. 2 - Prob. 7DQCh. 2 - What do we mean when we say that capital, drawing,...Ch. 2 - Prob. 1ECh. 2 - List the classification of each of the following...Ch. 2 - R. Dalberg operates Dalbergs Tours. The company...Ch. 2 - During the first month of operation, Graham...Ch. 2 - Speedy Sewing Services, owned by T. Nguyen, hired...Ch. 2 - During the first month of operations, Landish...Ch. 2 - The following errors were made in journalizing...Ch. 2 - Would the following errors cause the trial balance...Ch. 2 - During December of this year, G. Elden established...Ch. 2 - B. Kelso established Computer Wizards during...Ch. 2 - S. Myers, a speech therapist, opened a clinic in...Ch. 2 - On May 1, B. Bangle opened Self-Wash Laundry. His...Ch. 2 - The financial statements for Daniels Custom...Ch. 2 - During February of this year, H. Rose established...Ch. 2 - J. Carrie established Carries Photo Tours during...Ch. 2 - D. Johnston, a physical therapist, opened...Ch. 2 - On July 1, K. Resser opened Ressers Business...Ch. 2 - The financial statements for Baker Custom Catering...Ch. 2 - Prob. 1ACh. 2 - What Would You Say? A fellow accounting student...Ch. 2 - Prob. 3A
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