Account: A record of increases and decreases in specific asset, liability, or owner’s equity

items.
Chart of accounts: A list of accounts and the account numbers that identify their location
in the ledger.
Compound entry: A journal entry that involves three or more accounts.
Credit: The right side of an account.
Debit: The left side of an account.
Double-entry system: A system that records in appropriate accounts the dual effect of each
transaction.
General journal: The most basic form of journal.
General ledger: A ledger that contains all asset, liability, and owner’s equity accounts.
Journal: An accounting record in which transactions are initially recorded in chronologica
order.
Journalizing: The entering of transaction data in the journal.
Ledger: The entire group of accounts maintained by a company.
Normal balance: An account balance on the side where an increase in the account is
recorded.
Posting: The procedure of transferring journal entries to the ledger accounts.
Simple entry: A journal entry that involves only two accounts.
T-account: The basic form of an account.
Three-column form of account: A form with columns for debit, credit, and balance
amounts in an account.
Trial balance: A list of accounts and their balances at a given time.

DEBIT & CREDIT RULES

DEBIT - The right side of an account.
CREDIT - The left side of an account.

Assets
Owner's Drawings
Expense
Owner's Drawings
Expense

Revenue
Owner's Equity
Liabilities
ACCOUNTING PRINCIPLES BY KEISO, 12TH EDITION, P
83: Holz Disc Golf Course was opened on March 1
The following selected events and transactions occu
March.
Mar. 1 Invested $20,000 cash in the business.
3 Purchased Rainbow Golf Land for $15,000 c
price consists of land $12,000, shed $2,000, and eq
$1,000. (Make one compound entry.)

5 Paid advertising expenses of $900.

6 Paid cash $600 for a one-year insurance po

10 Purchased golf discs and other equipment
from Stevenson Company payable in 30 days.
18 Received $1,100 in cash for golf fees (Holz r
fees as service revenue).
19 Sold 150 coupon books for $10 each. Each b
contains 4 coupons that enable the holder to play o
disc golf.
 18 Received $1,100 in cash for golf fees (Holz r
fees as service revenue).
19 Sold 150 coupon books for $10 each. Each b
contains 4 coupons that enable the holder to play o
disc golf.
25 Withdrew $800 cash for personal use.
30 Paid salaries of $250.
30 Paid Stevenson Company in full.
31 Received $2,700 cash for golf fees.
Holz Disc Golf uses the following accounts: Cash, Pr
Insurance, Land, Buildings, Equipment, Accounts Pa
Unearned Service Revenue, Owner’s Capital, Owne
Service Revenue, Advertising Expense, and Salaries
Expense.

Instructions
Journalize the March transactions.
 JOURNAL ENTRY
DATE ACCOUNT TITLE AND EXPLANATIONS
1-Mar Cash
Owner's Capital
(Investment by the Owner )

3-Mar Land
Buildings
Equipment
Cash
(Purchased Rainbow Golf Land )

5-Mar Advertising Expense

Cash
(Paid Cash for advertising)

6-Mar Prepaid Insurance

Cash
(Paid cash in advance for 1-year insurance)

10-Mar Equipment
Accounts Payable
(Purchased equipment on account)

18-Mar Cash
Service Revenue
(Received cash for services performed)

19-Mar Cash
 Unearned Service Revenue
(Received cash from coupon Books)

25-Mar Owner's Drawings

Cash
(Cash withdrawal for personal use)

30-Mar Salaries and Wages Expense

Cash
(Paid salaries)

30-Mar Accounts Payable

Cash
(Paid creditors on account)

31-Mar Cash
Service Revenue
(Received cash for services performed)

ACCOUNTING PRINCIPLES BY KEISO, 12TH EDITION,

P2-2A, PAGE 84: Emily Valley is a licensed dentist. During the first
month of the operation of her business, the following events and
transactions occurred.
April 1 Invested $20,000 cash in her business.
1 Hired a secretary-receptionist at a salary of $700 per week
payable
monthly.
2 Paid office rent for the month $1,100.
3 Purchased dental supplies on account from Dazzle Compan
10 Performed dental services and billed insurance companies $
11 Received $1,000 cash advance from Leah Mataruka for an im
20 Received $2,100 cash for services performed from Michael
30 Paid secretary-receptionist for the month $2,800.
30 Paid $2,400 to Dazzle for accounts payable due.

Emily uses the following chart of accounts: No. 101 Cash, No. 112 Acco
Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unea
Revenue, No. 301Owner’s Capital, No. 400 Service Revenue, No. 726 Sa
Wages Expense, and No. 729 Rent Expense.
 30 Paid $2,400 to Dazzle for accounts payable due.

Emily uses the following chart of accounts: No. 101 Cash, No. 112 Acco
Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unea
Revenue, No. 301Owner’s Capital, No. 400 Service Revenue, No. 726 Sa
Wages Expense, and No. 729 Rent Expense.

Instructions

(a) Journalize the transactions.

(b) Post to the ledger accounts.
(c) Prepare a trial balance on April 30, 2017.
 REQUIREMENT (a): JOURNAL ENTRY
DATE ACCOUNT TITLE AND EXPLANATIONS
### Cash
Owner's Capital
(Investment by the Owner )

### No Entry - No Monetary change took place

### Rent Expense

Cash
(Paid office Rent )
### Supplies
Accounts Payable
(Purchased supplies on account )

### Accounts Receivable

Service Revenue
(services performed and revenue recognized )

### Cash
Unearned Service Revenue
(Received cash in advance for the services to be
performed )
### Cash
Service Revenue
(cash received and service performed)
 ### Salaries and Wages Expense
Cash
(Paid salary for the month )

### Accounts Payable

Cash
(Paid Dazzle Company on account)

REQUIREMENT (b): LEDGER

CASH
DATE EXPLANATIONS REF
1-Apr J1
2-Apr J1
11-Apr J1
20-Apr J1
30-Apr J1
30-Apr J1

ACCOUNTS RECEVABLE

DATE EXPLANATIONS REF

10-Apr J1

SUPPLIES

DATE EXPLANATIONS REF

3-Apr J1
ACCOUNTS PAYABLE

DATE EXPLANATIONS REF

3-Apr J1

30-Apr J1

UNEARNED SERVICE REVENUE

DATE EXPLANATIONS REF
11-Apr J1

SERVICE REVENUE
DATE EXPLANATIONS REF
10-Apr J1
20-Apr J1

SALARIES AND WAGES EXPENSE

DATE EXPLANATIONS REF
30-Apr J1

RENT EXPENSE
DATE EXPLANATIONS REF
2-Apr J1

OWNER'S CAPITAL
DATE EXPLANATIONS REF
1-Apr J1
 REQUIREMENT (C): TRIAL BALANCE
EMILY VALLEY, DENTIST
TRIAL BALANCE
APRIL 30, 2017

CASH
SUPPLIES
ACCOUNTS RECEIVABLE
ACCOUNTS PAYABLE
UNEARNED SERVICE REVENUE
SERVICE REVENUE
OWNER'S CAPITAL
RENT EXPENSE
SALARIES AND WAGES EXP

ACCOUNTING PRINCIPLES BY KEISO, 12TH EDITION,

P2-3A, PAGE 84: Maquoketa Services was formed on May 1, 2017. T
following transactions took place during the first month.

Transactions on May 1:
1. Jay Bradford invested $40,000 cash in the company, as its sole owne
2. Hired two employees to work in the warehouse. They will each be pa
salary of $3,050 per month.
3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash
advance for the first year.
4. Purchased furniture and equipment costing $30,000. A cash payment
$10,000 was made immediately; the remainder will be paid in 6 months
5. Paid $1,800 cash for a one-year insurance policy on the furniture and
equipment.

Transactions during the remainder of the month:

6. Purchased basic office supplies for $420 cash.
7. Purchased more office supplies for $1,500 on account.
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on
account.
9. Paid $400 to suppliers for accounts payable due.
10. Received $3,000 from customers in payment of accounts receivable
11. Received utility bills in the amount of $380, to be paid next month.
 7. Purchased more office supplies for $1,500 on account.
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on
account.
9. Paid $400 to suppliers for accounts payable due.
10. Received $3,000 from customers in payment of accounts receivable
11. Received utility bills in the amount of $380, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $6,100.

Instructions
(a) Prepare journal entries to record each of the events listed. (Omit
explanations.)
(b) Post the journal entries to T-accounts.
(c) Prepare a trial balance as of May 31, 2017.

REQUIREMENT (a): JOURNAL ENTRY

TRANS. ACCOUNT TITLE AND EXPLANATIONS
1. Cash
Owner's Capital

2. No Entry - No a transaction

3. Prepaid Rent
Cash

4. Equipment
Cash
 Accounts Payable

5 Prepaid Insurance
Cash

6. Supplies
Cash

7. Supplies
Accounts Payable

8. Cash
Accounts Receivable
Service Revenue

9. Accounts Payable
Cash

10. Cash
Accounts Receivable

11. Utilities Expense

Accounts Payable

12. Salaries and Wages Expense

Cash

REQUIREMENT (b): LEDGER

CASH EQUIPMENT
(1) 40,000 (4) 30,000
(3) 24,000
(4) 10,000 30,000
(5) 1,800
(6) 420
(8) 8,000
(9) 400 ACCOUTNS PAYABLE
(10) 3,000 (4)
(12) 6,100 (7)
(1) 40,000 (4) 30,000
(3) 24,000
(4) 10,000 30,000
(5) 1,800
(6) 420
(8) 8,000
(9) 400 ACCOUTNS PAYABLE
(10) 3,000 (4)
(12) 6,100 (7)
8,280 (9) 400
(11)

ACCOUTNS RECEIVABLE
(8) 12,000
(10) 3,000
9,000 SERVICE REVENUE
(8)

SUPPLIES
(6) 420
(7) 1,500
1,920
OWNER'S CAPITAL
(1)

PREPAID INSURANCE
(5) 1,800

1,800
UTILITIES EXPENSE
(11) 380

380
PREPAID RENT
(3) 24,000

24,000 SALARIES AND WAGES EXP

(12) 6,100

6,100
REQUIREMENT (C): TRIAL BALANCE
MAQUOKETA SERVICES
TRIAL BALANCE
MAY 31, 2017

CASH

SUPPLIES
ACCOUNTS RECEIVABLE
PREPAID INSURANCE

EQUIPMENT
PREPAID RENT

SERVICE REVENUE
ACCOUNTS PAYABLE
OWNER'S CAPITAL

UTILITIES EXPENSE
SALARIES AND WAGES EXPENSE
et, liability, or owner’s equity

rs that identify their location

e accounts.

ccounts the dual effect of each

owner’s equity accounts.

ially recorded in chronological

any.
crease in the account is

edger accounts.
s.

ebit, credit, and balance

n time.

count.
ount.

Increse - Debit
Decrease - Credit
Increse - Credit
Decrease - Dedit
 DATE
O, 12TH EDITION, P2-1A, PAGE 1-Mar
ened on March 1 by Ian Holz.
transactions occurred during

he business. 3-Mar

Land for $15,000 cash. The

ed $2,000, and equipment
ry.)

of $900. 5-Mar
year insurance policy.
other equipment for $1,050
6-Mar
in 30 days.
r golf fees (Holz records golf

r $10 each. Each book

e holder to play one round of
 r golf fees (Holz records golf
r $10 each. Each book
e holder to play one round of 10-Mar

ersonal use.
n full. 18-Mar
olf fees.
ccounts: Cash, Prepaid
ment, Accounts Payable, 19-Mar
r’s Capital, Owner’s Drawings,
nse, and Salaries and Wages

25-Mar

30-Mar

30-Mar

31-Mar
REF DEBIT CREDIT
20,000
20,000

12000
2000
1000
15000

900
900

600
600

1050
1050

1100
1100

1500
 1500

800
800

250
250

1050
1050

2700
2700

DATE
###
During the first
owing events and

alary of $700 per week

###

0. ###
nt from Dazzle Company $4,000.
d insurance companies $5,100.
Leah Mataruka for an implant.
erformed from Michael Santos. ###
month $2,800.
ayable due.

101 Cash, No. 112 Accounts

Payable, No. 209 Unearned Service
ice Revenue, No. 726 Salaries and
ayable due.

101 Cash, No. 112 Accounts

Payable, No. 209 Unearned Service ###
ice Revenue, No. 726 Salaries and

###

###

###

###
NTRY
REF DEBIT CREDIT
101 20000
301 20000 CASH
DATE
1-Apr
e took place 2-Apr
11-Apr
729 1100 20-Apr
101 1100 30-Apr
30-Apr
126 4000
201 4000

112 5100
400 5100
e recognized )

101 1000
209 1000
he services to be

101 2100
400 2100
 726 2800
101 2800

201 2400
101 2400

NO. 101
DEBIT CREDIT BALANCE
20000 20000
1100 18900
1000 19900
2100 22000
2800 19200
2400 16800

NO. 112

DEBIT CREDIT BALANCE

5100 5100

NO. 126

DEBIT CREDIT BALANCE

4000 4000
 NO. 201

DEBIT CREDIT BALANCE

4000 4000

2400 1600

NO.209
DEBIT CREDIT BALANCE
1000 1000

NO.400
DEBIT CREDIT BALANCE
5100 5100
2100 7200

NO.209
DEBIT CREDIT BALANCE
2800 2800

NO.729
DEBIT CREDIT BALANCE
1100 1100

NO.209
DEBIT CREDIT BALANCE
20000 20000
ANCE
DENTIST
NCE
017
DEBIT CREDIT
16800
4000
5100
1600
1000
7200
20000
1100
2800
29800 29800

REQUIREMENT (a): JO
TRANSACCOUNT TITLE AND EXPLANA
12TH EDITION, 1. Cash
rmed on May 1, 2017. The
t month.
2. No Entry - No a transaction

mpany, as its sole owner. 3. Prepaid Rent

se. They will each be paid a

ouse; paid $24,000 cash in 4. Equipment

30,000. A cash payment of

will be paid in 6 months.
licy on the furniture and 5 Prepaid Insurance

nth: 6. Supplies
.
account.
cash and $12,000 on 7. Supplies

ue.
t of accounts receivable.
to be paid next month.
account.
cash and $12,000 on

ue.
t of accounts receivable. 8. Cash
to be paid next month. Accounts Receivable
ees, totaling $6,100.

9. Accounts Payable
events listed. (Omit

10. Cash

11. Utilities Expense

12. Salaries and Wages Expense

REF DEBIT CREDIT

40000
40000

24000
24000

30000
10000
 20000

1800
1800

420
420

1500
1500

8000
12000
20000

400
400

3000
3000

380
380

6100
6100

EQUIPMENT
) 30,000
REQUIREMENT (C
30,000

ACCOUTNS PAYABLE
(4) 20,000
(7) 1,500
) 30,000

30,000

ACCOUTNS PAYABLE
(4) 20,000
(7) 1,500
) 400
(11) 380
21,480

SERVICE REVENUE
(8) 20,000

20,000

OWNER'S CAPITAL
(1) 40,000

40,000

UTILITIES EXPENSE
1) 380

380

SALARIES AND WAGES EXPENSE

2) 6,100

6,100
NCE
RVICES
NCE
17

DEBIT CREDIT
8280

1920
9000
1800

30000
24000

20000
21480
40000

380
6100

81480 81480
ACCOUNT TITLE AND EXPLANATIONS REF DEBIT
Cash 20,000
Owner's Capital
(Investment by the Owner )

Land 12000
Buildings 2000
Equipment 1000
Cash
(Purchased Rainbow Golf Land )

Advertising Expense 900

Cash
(Paid Cash for advertising)

Prepaid Insurance 600

Cash
(Paid cash in advance for 1-year insurance)
Equipment 1050
Accounts Payable
(Purchased equipment on account)

Cash 1100
Service Revenue
(Received cash for services performed)

Cash 1500
Unearned Service Revenue
(Received cash from coupon Books)

Owner's Drawings 800

Cash
(Cash withdrawal for personal use)

Salaries and Wages Expense 250

Cash
(Paid salaries)

Accounts Payable 1050

Cash
(Paid creditors on account)

Cash 2700
Service Revenue
(Received cash for services performed)
ACCOUNT TITLE AND EXPLANATIONS REF DEBIT
Cash 101 20000
Owner's Capital 301
(Investment by the Owner )

No Entry - No Monetary change took place

Rent Expense 729 1100

Cash 101
(Paid office Rent )
Supplies 126 4000
Accounts Payable 201
(Purchased supplies on account )
Accounts Receivable 112 5100
Service Revenue 400
(services performed and revenue recognized )

Cash 101 1000

Unearned Service Revenue 209
(Received cash in advance for the services to be
performed )
Cash 101 2100
Service Revenue 400
(cash received and service performed)

Salaries and Wages Expense 726 2800

Cash 101
(Paid salary for the month )

Accounts Payable 201 2400

Cash 101
(Paid Dazzle Company on account)
EXPLANATIONS REF DEBIT CREDIT
J1 20000
J1 1100
J1 1000
J1 2100
J1 2800
J1 2400

SERVICE REVENUE

DATE EXPLANATIONS

10-Apr

20-Apr

ACCOUNTS PAYABLE

DATE

3-Apr

30-Apr
REQUIREMENT (C): TRIAL BALANCE

EMILY VALLEY, DENTIST

TRIAL BALANCE
APRIL 30, 2017
DEBIT
CASH 16800
ACCOUNTS RECEIVABLE 5100
SUPPLIES 4000
ACCOUNTS PAYABLE
UNEARNED SERVICE REVENUE
SERVICE REVENUE
SALARIES & WAGES EXPENSE 2800
RENT EXPENSE 1100
OWNER'S CAPITAL
29800
QUIREMENT (a): JOURNAL ENTRY
TITLE AND EXPLANATIONS REF DEBIT CREDIT
40000
Owner's Capital 40000

No a transaction

24000
Cash 24000

30000
Cash 10000
Accounts Payable 20000

surance 1800
Cash 1800

420
Cash 420

1500
Accounts Payable 1500
 8000
Receivable 12000
Service Revenue 20000

Payable 400
Cash 400

3000
Accounts Receivable 3000

xpense 380
Accounts Payable 380

nd Wages Expense 6100

Cash 6100

CASH
(1) 40000
(3)
(4)
(5)
(6)
 (8) 8000
(9)
(10) 3000
(12)
8280

USUALLY DABIT
BALANCE

ASSETS
EXPENSES
DRAWINGS

REQUIREMENT (C): TRIAL BALANCE

 MAQUOKETA SERVICES
TRIAL BALANCE
MAY 31, 2017
DEBIT CREDIT
CASH 8,280
SUPPLIES 1,920
ACCOUNTS RECEIVABLE 9,000
PREPAID INSURANCE 1,800
EQUIPMENT 30,000
PREPAID RENT 24,000
SERVICE REVENUE 20,000
ACCOUNTS PAYABLE 21,480
OWNER'S CAPITAL 40,000
UTILITIES EXPENSE 380
SALARIES AND WAGES EXPENSE 6,100
81,480 81,480
CREDIT

20,000

15000

900

600
1050

1100

1500

800

250

1050

2700
CREDIT

20000

1100

4000
5100

1000

2100

2800

2400
 NO. 101
BALANCE
20000
18900
19900
22000
19200
16800

NO.400

REF DEBIT CREDIT BALANCE

J1 5100 5100

J1 2100 7200

NO. 201

EXPLANATIONS REF DEBIT CREDIT BALANCE

J1 4000 4000

J1 2400 1600
CREDIT
 1600
1000
7200

20000
29800
 TRANS. ACCOUNT TITLE AND EXPLANATIONS REF
1. Cash
Owner's Capital

2. No Entry - No a transaction

3. Prepaid Rent
Cash
24000
10000 4. Equipment
1800 Cash
420 Accounts Payable
400 5 Prepaid Insurance
Cash
6100
6. Supplies
Cash

7. Supplies
Accounts Payable

8. Cash
Accounts Receivable
Service Revenue

9. Accounts Payable
Cash

10. Cash
Accounts Receivable

11. Utilities Expense

Accounts Payable

12. Salaries and Wages Expense

Cash
DEBIT CREDIT
40000
40000

24000
24000

30000
10000
20000
1800 ACCOUNTS PAYABLE
1800 (4)
(7)
420 (9) 400
420 (11)

1500
1500
USUALLY CREDIT BALA

8000
12000
20000

400 LIABILITIES
400 OWNER'S EQUI
REVENUES
3000
3000

380
380

6100
6100
 20000
1500

380
21480

USUALLY CREDIT BALANCE

LIABILITIES
OWNER'S EQUITY
REVENUES