Textbook Problem

CASH, MODIFIED CASH, AND ACCRUAL BASES OF ACCOUNTING For each journal entry shown below, indicate the accounting method(s) for which the entry would be appropriate. If the journal entry is not appropriate for a particular accounting method, explain the proper accounting treatment for that method.

1. Office Equipment

    Cash

        Purchased equipment for cash

2. Office Equipment

    Accounts Payable

        Purchased equipment on account

3. Cash

    Revenue

        Cash receipts for week

4. Accounts Receivable

    Revenue

        Services performed on account

5. Prepaid Insurance

    Cash

        Purchased prepaid asset

6. Supplies

    Accounts Payable

        Purchased prepaid asset

7. Phone Expense

    Cash

        Paid phone bill

8. Wages Expense

    Cash

        Paid wages for month

9. Accounts Payable

    Cash

        Made payment on account

Adjusting Entries:

10. Supplies Expense

    Supplies

11. Wages Expense

    Wages Payable

12. Depreciation Expense—Office Equipment

    Accumulated Depreciation—Office Equipment