Chapter_02 (2)

ANALYZING AND RECORDING
TRANSACTIONS
Chapter 2
© 2009 The McGraw-Hill Companies, Inc.,

All Rights Reserved
WHAT WE HAVE DONE SO FAR…
 Importance of accounting
 Fundamental principles of accounting
 Transaction analysis and the
accounting equation
 Financial statements
 Return on assets
Assets
Assets Liabilities
Liabilities Equity
Equity
= +
FastForward
FastForward
Income Statement
Income Statement
For Month Ended December 31, 2009
For Month Ended December 31, 2009
Revenues:
Revenues:
Consulting revenue $ 5,800
Rental revenue 300
Rental revenue 300
Total revenues $ 6,100
Expenses:
Expenses:
Rent expense 1,000
Rent expense 1,000
Salaries expense 700
Salaries expense 700
Total expenses 1,700
Net income $ 4,400
Net income $ 4,400
McGraw-Hill/Irwin Slide 2
WHAT WE HAVE DONE SO FAR…
a. Purchased land for $4,000 cash.
b. Purchased $1,000 of office supplies on credit.
c. Billed a client $1,900 for services provided.
d. Paid the $1,000 account payable created by the credit purchase of office supplies
in transaction b.
e. Collected $1,900 cash for the billing in transaction c.
ASSETS = LIABILITIES + EQUITY
Cash + Accounts + Office + Land = Accounts + Trista, + Revenues
Receivable Supplies Payable Capital
$21,000 + $0 + $3,000 + $19,000 = $0 + $43,000 + $0
A - 4,000 + 4,000
B + 1,000 +1,000
C + 1,900 + 1,900
D - 1,000 - 1,000
E + 1,900 - 1,900
$17,900 + $0 + $4,000 + $23,000 = $0 + $43,000 + $1,900

CHAPTER OUTLINE
 Analyzing and recording process
 Analyzing and processing transaction
 Trial balance
C1 ANALYZING AND RECORDING
PROCESS
Record relevant transactions

Analyze each transaction and
and events in a journal
event from source documents
Post journal
information
Prepare and analyze to ledger
the trial balance accounts
C2
SOURCE DOCUMENTS
Bills from
Checks Suppliers Purchase
Orders
Employee
Earnings
Records Bank
Statements
Sales
Tickets
C3 THE ACCOUNT AND ITS
ANALYSIS
An
An account
account is is aa
record
record of of
increases The
The general
general
increases and and ledger
decreases
decreases in in aa ledger isis aa record
record
specific containing
containing all
all
specific asset,
asset, accounts
liability,
liability, equity,
equity, accounts usedused byby
revenue, the
the company.
company.
revenue, or or
expense
expense item.item.
ANALYSIS
Assets
Assets Liability
Liability Equity
Equity
Asset
Accounts
Accounts
Accounts = Liability
Accounts
Accounts
Accounts + Equity
Accounts
Accounts
Accounts
Owner, Capital
Owner, Withdrawals
C3
ASSET ACCOUNTS
Cash
Accounts
Land
Receivable
Buildings
Asset
Asset Notes
Accounts
Accounts Receivable
Equipment Prepaid
Accounts
Supplies
C3
LIABILITY ACCOUNTS
Accounts
Accounts Notes
Notes
Payable
Payable Payable
Payable
Compared to Compared to
Accounts
Receivable? Liability Notes Receivable?
Accounts
Accrued
Accrued Unearned
Unearned
Liabilities
Liabilities Revenue
Revenue
EX: wage payable, tax EX: magazine
payable, interest payable subscriptions
C3
EQUITY ACCOUNTS
Owner’s
Owner’s Owner’s
Owner’s
Capital
Capital Withdrawals
Withdrawals
Equity
Accounts
Revenues
Revenues Expenses
Expenses
ANALYSIS
Assets = Liabilities
Liabilities + Equity
Equity
+ – + –
Owner’s
Owner’s Owner's
Owner's Revenues
Revenues Expenses
Expenses
Capital
Capital Withdrawals
Withdrawals
C4 LEDGER AND CHART OF
ACCOUNTS
The ledger is a collection of all accounts for an
information system. A company’s size and diversity
of operations affect the number of accounts needed.
The chart of accounts is a list of all accounts and includes an

identifying number for each account.
Account Number Account Name Accounting Number Accounting Name
101 Cash 302 C. Taylor, Withdrawals
106 Accounts receivable 403 Revenues
126 Supplies 406 Rental revenue
128 Prepaid insurance 622 Salaries expense
167 Equipment 637 Insurance expense
201 Accounting payable 640 Rent expense
236 Unearned revenue 652 Supplies expense
301 C. Taylor, Capital 690 Utilities expense
C5
DEBITS AND CREDITS

A T-account represents a ledger account and is a
tool used to understand the effects of one or more
transactions.
Account Title
(Left side) (Right side)
Debit Credit
Rules for using accounts
Accounts are assigned balance sides (Debit or Credit).
To increase any account, use the balance side.
To decrease any account, use the side opposite the
balance.
Finding account balances

If total debits = total credits, the account balance is zero.
If total debits are greater than total credits, the account has
a debit balance equal to the difference of the two totals.
If total credits are greater than total debits, the account has
a credit balance equal to the difference of the two totals.
C5
DOUBLE-ENTRY ACCOUNTING
Assets
Equity
ASSETS LIABILITIES EQUITIES
Debit Credit Debit Credit Debit Credit

+ - - + - +
C5
Equity
Owner’s
Owner’s _ Owner's
Owner's _ Expenses
Capital
Capital Withdrawals
Withdrawals + Revenues
Revenues Expenses
Owner’s Owner's Revenues Expenses

Capital Withdrawals
Debit Credit Debit Credit Debit Credit Debit Credit

- + + - - + + -
C5
An account balance is the difference between the increases
and decreases in an account.
Notice the T-Account.
Cash
Investment by owner 30,000 Purchase of supplies 2,500
Consulting services revenues earned 4,200 Purchase of equipment 26,000
Collection of accounts receivable 1,900 Payment of rent 1,000
Payment of salary 700
Payment of account payable 900
Withdrawal by owner 200
Total increases 36,100 Total decreases 31,300
Balance 4,800
P1
JOURNALIZING &
POSTING TRANSACTIONS
Assets
Equity
T- Account
(Left side) (Right side)
Debit Credit
Step 1: Analyze
Step 2: Apply double-
transactions and source
entry accounting
documents.
ACCOUNT NAME: ACCOUNT No. GENERAL JOURNAL Page 123

Post.
Date Description PR Debit Credit Balance Date Description Ref. Debit Credit
Step 4: Post entry to ledger Step 3: Record journal entry

P1 JOURNALIZING
TRANSACTIONS

Transaction
Transaction 
Titles
Titles of
of Affected
Affected
Date
Date Accounts
Accounts
GENERAL
GENERALJOURNAL
JOURNAL Page
Page11
Date
Date Description
Description PR
PR Debit
Debit Credit
Credit
2009
2009
Dec.
Dec. 11 Cash
Cash 30,000
30,000
C.
C.Taylor,
Taylor,Capital
Capital 30,000
30,000
Investment
Investmentby
byowner
owner
Dec.
Dec. 22 Supplies
Supplies 2,500
2,500
Cash
Cash 2,500
2,500
Purchased
Purchasedsupplies
suppliesfor
forcash
cash

Transaction
Transaction 
Dollar
Dollar amount
amount of
of debits
debits
explanation
explanation and
and credits
credits
P1
BALANCE COLUMN ACCOUNT

T-accounts are useful illustrations, but balance
column ledger accounts are used in practice.
CASH
CASH ACCOUNT
ACCOUNT No.
No. 101
101
Date
Date Description
Description PR
PR Debit
Debit Credit
Credit Balance
Balance
2009
2009
Dec.
Dec. 11 Initial
Initial investment
investment 30,000
30,000 30,000
30,000
Dec.
Dec. 22 Purchased
Purchased supplies
supplies 2,500
2,500 27,500
27,500
Dec.
Dec. 33 Purchased
Purchased equipment
equipment 26,000
26,000 1,500
1,500
Dec.
Dec. 10
10 Collection
Collection from
from customer
customer 4,200
4,200 5,700
5,700
P1
POSTING JOURNAL ENTRIES

GENERAL JOURNAL Page 1
Da te De scription PR De bit Cre dit
2009
De c. 1 Ca sh 30,000
C. Ta ylor, Ca pita l 30,000
Investment b y owner
De c. 2 Supplie s 2,500
Ca sh 2,500
Purchased store supplies
for cash
1 Identify the debit account in ledger.
CASH ACCOUNT No. 101
Date Description PR Debit Credit Balance

2009
Dec. 3 Purchased equipment G1 20,000.00 ########

Dec. 10 Collection from customer G1 2,200.00 ########
P1

2009
De c. 1 Ca sh 30,000
Ca sh 2,500
for cash
2 Enter the date.


2009
Dec. 1
Dec. 3 Purchased equipment G1 20,000.00 ########

Dec. 10 Collection from customer G1 2,200.00 ########
P1

2009
De c. 1 Ca sh 30,000
Ca sh 2,500
for cash
3 Enter the amount and description.


2009
Dec. 1 Investment by owner 30,000
Dec. 3 Purchased equipment G1 20,000 (20,000)

Dec. 10 Collection from customer G1 2,200 (17,800)
P1

2009
De c. 1 Ca sh 30,000
Ca sh 2,500
for cash
4 Enter the journal reference.

2009
Dec. 1 Investment by owner G1 30,000

P1

2009
De c. 1 Ca sh 30,000
Ca sh 2,500
for cash
5 Compute the balance.


2009
Dec. 1 Investment by owner G1 30,000 30,000

P1

2009
De c. 1 Ca sh 101 30,000
Ca sh 2,500
for cash
6 Enter the ledger reference.

2009
Dec. 1 Investment by owner G1 30,000 30,000

A1
ANALYZING TRANSACTIONS
Transaction: Owner invested $30,000 in FastForward on Dec. 1.
Analysis:
Assets = Liabilities + Equity
Cash Capital
30,000 30,000
Double entry:
(1) Cash 101 30,000
C. Taylor, Capital 301 30,000
Posting:
Cash 101 C. Taylor, Capital 301 301
(1) 30,000 (1) 30,000
A1
Transaction: FastForward purchases supplies by paying $2,500
cash.
Analysis:
Cash Supplies Capital
(2,500) 2,500
Double entry:
(2) Supplies 126 2,500
Cash 101 2,500
Posting:
Supplies 126 Cash 101
(2) 2,500 (1) 30,000 (2) 2,500
A1
Transaction: FastForward purchases equipment by paying $26,000
cash.
Analysis:
Cash Equipment Capital
(26,000) 26,000
Double entry:
(3) Equipment 167 26,000
Cash 101 26,000
Posting:
Equipment 167 Cash 101
(3) 26,000 (1) 30,000 (2) 2,500
(3) 26,000
A1
Transaction: FastForward purchases $7,100 of supplies on credit.
Analysis:
Supplies Accounts Payable Capital
7,100 7,100
Double entry:
(4) Supplies 126 7,100
Accounts payable 201 7,100
Posting:
Supplies 126 Accounts Payable 201
(2) 2,500 (4) 7,100
(4) 7,100
A1
Transaction: FastForward provides consulting services and
immediately collects $4,200 cash.
Analysis:
Cash Revenue
4,200 4,200
Double entry:
(5) Cash 101 4,200
Consulting Revenue 403 4,200
Posting:
Cash 403 Consulting Revenue 101
(1) 30,000 (2) 2,500 (5) 4,200
(5) 4,200 (3) 26,000
A TRIAL BALANCE
FastForward
Trial Balance
December 31, 2009
Debits Credits
Cash $ 4,350
Accounts receivable -
Supplies 9,720
Prepaid Insurance 2,400
Equipment 26,000
Accounts payable $ 6,200
Unearned consulting revenue 3,000
C. Taylor, Capital 30,000
Owner's Withdrawals 200
Consulting revenue 5,800
Rental revenue 300
Salaries expense 1,400
Rent expense 1,000
Utilities expense 230
Total $ 45,300 $ 45,300
EXAMPLE: PREPARING GENERAL
JOURNAL ENTRIES
Prepare general journal entries for the following transactions of a
new company called Special Pics.
Aug. 1 Madison Harris, the owner, invested $14,250 cash and $61,275
of photography equipment in the company.
Aug. 2 The company paid $3,300 cash for an insurance policy covering
the next 24 months.
Aug. 5 The company purchased office supplies for $2,707 cash.
Aug. 20 The company received $3,250 cash in photography fees
earned.
Aug. 31 The company paid $871 cash for August utilities.
Quick analysis:
(1) Cash , Equipment , Capital
(2) Cash , Prepaid Insurance
(3) Cash , Supplies
(4) Cash , Revenue
(5) Cash , Utilities expense
GENERAL JOURNAL
Date Account Titles and Explanation P.R. Debit Credit
Aug 1 Cash 14,250

Photography Equipment 61,275
M. Harris, Capital 75,525
Owner investment in business
2 Prepaid Insurance 3,300
Cash 3,300
Acquired 24 months of insurance
coverage
5 Office Supplies 2,707
Cash 2,707
Purchased office supplies
20 Cash 3,250
Photography Fees Earned 3,250
Collected photography fees
31 Utilities Expense 871
Cash 871
Paid for August utilities
QUICK CHECK
1. The accounting process begins with:
A. Analysis of business transactions and source documents.
B. Preparing financial statements and other reports.
C. Summarizing the recorded effect of business transactions.
D. Presentation of financial information to decision-makers.
E. Preparation of the trial balance.
2. A sales invoice:
A. Is a type of source document.
B. Is used by sellers to record the sale.
C. Is used by buyers to record purchases.
D. Gives rise to an entry in the accounting process.
E. All of these.
QUICK CHECK
3. Source documents include all of the following except:
A. Sales tickets.
B. Ledgers.
C. Checks.
D. Purchase orders.
E. Bank statements.
4. Unearned revenues are:

A. Revenues that have been earned and received in cash.
B. Revenues that have been earned but not yet collected in cash.
C. Liabilities created when a customer pays in advance for products
or services before the revenue is earned.
D. Recorded as an asset in the accounting records.
E. Increases to owners' capital.
QUICK CHECK
5. Prepaid expenses are:
A. Payments made for products and services that do not ever
expire.
B. Classified as liabilities on the balance sheet.
C. Decreases in equity.
D. Assets that represent prepayments of future expenses.
E. Promises of payments by customers.
6. A list of all accounts and the identification number assigned

to each account used by a company is called a:
A. Source document.
B. Journal.
C. Trial balance.
D. Chart of accounts.
E. General Journal.
QUICK CHECK
7. A credit is used to record:
A. A decrease in an expense account.
B. A decrease in an asset account.
C. An increase in an unearned revenue account.
D. An increase in a revenue account.
E. All of these.
8. Of the following accounts, the one that normally has a credit

balance is:
A. Cash.
B. Office Equipment.
C. Sales Salaries Payable.
D. Owner, Withdrawals.
E. Sales Salaries Expense.
QUICK CHECK
9. Double-entry accounting is an accounting system:
A. That records each transaction twice.
B. That records the effects of transactions and other events in at least two
accounts with equal debits and credits.
C. In which each transaction affects and is recorded in two or more accounts
but that could include two debits and no credits.
D. That may only be used if T-accounts are used.
E. That insures that errors never occur.
10. On September 30, the Cash account of Value Company had a

normal balance of $5,000. During September, the account was debited
for a total of $12,200 and credited for a total of $11,500. What was the
balance in the Cash account at the beginning of September?
A. A $0 balance.
B. A $4,300 debit balance.
C. A $4,300 credit balance.
D. A $5,700 debit balance.
E. A $5,700 credit balance.
After processing its remaining transactions for
P2
December, FastForward’s Trial Balance is prepared.
FastForward
Trial Balance The trial balance
December 31, 2009
lists all account
Debits Credits
Cash $ 4,350
balances in the
Accounts receivable - general ledger. If
Supplies 9,720
Prepaid Insurance 2,400
the books are in
Equipment 26,000 balance, the total
Unearned consulting revenue 3,000
debits will equal the
C. Taylor, Capital 30,000 total credits.
Owner's Withdrawals 200
Consulting revenue 5,800
Rental revenue 300
Rent expense 1,000
Total $ 45,300 $ 45,300
P2
PREPARING A TRIAL BALANCE
P2 SEARCHING FOR AND
CORRECTING ERRORS
If the trial balance does not balance, the
error(s) must be found and corrected.
Make sure the trial Re-compute each

balance columns are account balance in the
correctly added. ledger.
Make sure account Verify that each journal

balances are correctly entry is posted correctly.
entered from the ledger.
See if debit or credit Verify that each original

accounts are mistakenly journal entry has equal
placed on the trial balance. debits and credits.
Example 1: Unbalanced trial balance
Account Debit Credit
Cash 53
Accounts receivable 115
Accounts payable 106
Income 191
Wages expense 75
Marketing expense 54
Total 222 372
Difference 150
The difference of 150 is divided by 2 to provide the amount of 75.

=> wages expense acct has a credit balance of 75 => WRONG!!!
Example 1: Corrected trial balance
Account Debit Credit
Cash 53
Accounts receivable 115
Accounts payable 106
Income 191
Wages expense 75
Marketing expense 54
Total 297 297
Difference 0
Example 2: Transposition errors
An $89 payment for telephone bill was journalized as a debit to
telephone expense by $98 and credit to cash by $98.
Analysis:
This is a transposition error; the digits are reversed in the
amount. The difference between $98 and $89 is 9 (divided by 9)
This error can be corrected as if debit to cash by $9 and credit
to telephone expense by $9.
P3 USING A TRIAL BALANCE TO
PREPARE FINANCIAL STATEMENTS
Point in Point in
Time Period of Time Time
Statement of Cash Flows
Statement of Owner’s Equity

Income Statement
Beginning Ending
Balance Balance
Sheet Sheet
P3
INCOME STATEMENT
FASTFORWARD
Income Statement
For the Month Ended December 31, 2009
Revenues:
Rental revenue 300
Expenses:
Rent expense 1,000
Net income $ 3,470
P3
STATEMENT OF OWNER'S EQUITY
FASTFORWARD
Statement of Owner's Equity
C. Taylor, Capital 12/1/09 $ -
Connections
Net income for December 3,470
Plus: Investments by Owner 30,000
33,470
Less: Owner Withdrawals 200
. C. Taylor, Capital, 12/31/09 $ 33,270
FASTFORWARD
Income Statement
Revenues:
Rental revenue 300
Expenses:
Rent expense 1,000
Net income $ 3,470
P3
BALANCE SHEET
Statement of Owner's Equity
For the Month Ended December 31, 2009 FASTFORWARD
C. Taylor, Capital 12/1/09 $ - Balance Sheet
Net income for December 3,470 December 31, 2009
Plus: Investments by Owner 30,000
Assets
33,470
Less: Owner Withdrawals 200 Cash $ 4,350
C. Taylor, Capital, 12/31/09 $ 33,270 Supplies 9,720
Prepaid insurance 2,400
Equipment 26,000
Total assets $ 42,470
Liabilities
Unearned revenue 3,000
Connections Total liabilities
Equity
9,200
C. Taylor, Capital $ 33,270

Total equity 33,270
Total liabilities and equity $ 42,470
P3
PRESENTATION ISSUES
1. Dollar signs are not used in journals and ledgers.
2. Dollar signs appear in financial statements and other
reports such as trial balances. The usual practice is to
put dollar signs beside only the first and last numbers
in a column.
3. When amount are entered in the journal, ledger, or trial
balance, commas are optional to indicate thousands,
millions, and so forth.
4. Commas are always used in financial statements.
5. Companies commonly round amounts in reports to the
nearest dollar, or even to a higher level.
A2
Debt to Assets Ratio
Total Debt
Total Assets
Evaluates the level of debt risk.
A higher ratio indicates that there is

a greater probability that a company
will not be able to pay it’s debt in the
future.
QUICK CHECK
1. A liability created by the receipt of cash from customers in payment for
products or services that have not yet been delivered to the customers is:
A. Recorded as a debit to an unearned revenue account.
B. Recorded as a debit to a prepaid expense account.
C. Recorded as a credit to an unearned revenue account.
D. Recorded as a credit to a prepaid expense account.
E. Not recorded in the accounting records until the earnings process is complete.
2. On September 30, the Cash account of Value Company had a normal

balance of $5,000. During September, the account was debited for a total of
$12,200 and credited for a total of $11,500. What was the balance in the Cash
account at the beginning of September?
A. A $0 balance.
B. A $4,300 debit balance.
C. A $4,300 credit balance.
D. A $5,700 debit balance.
E. A $5,700 credit balance.
QUICK CHECK
3. On April 30, Holden Company had an Accounts Receivable balance of
$18,000. During the month of May, total credits to Accounts Receivable were
$52,000 from customer payments. The May 31 Accounts Receivable balance
was $13,000. What was the amount of credit sales during May?
A. $ 5,000.
B. $47,000.
C. $52,000.
D. $57,000.
E. $32,000.
4. During the month of February, Hoffer Company had cash receipts of

$7,500 and cash disbursements of $8,600. The February 28 cash balance
was $1,800. What was the January 31 beginning cash balance?
A. $700.
B. $1,100.
C. $2,900.
D. $0.
E. $4,300.
QUICK CHECK
5. The following transactions occurred during July:
1. Received $900 cash for services provided to a customer during July.
2. Received $2,200 cash investment from Barbara Hanson, the owner of
the business.
3. Received $750 from a customer in partial payment of his account
receivable which arose from sales in June.
4. Provided services to a customer on credit, $375.
5. Borrowed $6,000 from the bank by signing a promissory note.
6. Received $1,250 cash from a customer for services to be rendered
next year. => unearned revenue (liability)
What was the amount of revenue for July?
A. $ 900.
B. $ 1,275.
C. $ 2,525.
D. $ 3,275.
E. $11,100.
QUICK CHECK
6. Zed Bennett opened an art gallery and as a dealer completed these
transactions:
1. Started the gallery, Artery, by investing $40,000 cash and equipment
valued at $18,000.
2. Purchased $70 of office supplies on credit.
3. Paid $1,200 cash for the receptionist's salary.
4. Sold a painting for an artist and collected a $4,500 cash commission on
the sale.
5. Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were
posted?
A. $12,230.
B. $12,430.
C. $43,300.
D. $43,430.
E. $61,430.
QUICK CHECK
7. The debt ratio is used:
A. To measure the relation of equity to expenses.
B. To reflect the risk associated with a company's debts.
C. Only by banks when a business applies for a loan.
D. To determine how much debt a firm should pay off.
E. All of these.
8. Which of the following is the formula used to calculate the debt

ratio?
A. Total Equity/Total Liabilities.
B. Total Liabilities/Total Equity.
C. Total Liabilities/Total Assets.
D. Total Assets/Total Liabilities.
E. Total Equity/Total Assets.
QUICK CHECK
9. Which of the following statements is incorrect?
A. Higher financial leverage involves higher risk.
B. Risk is higher if a company has more liabilities.
C. Risk is higher if a company has higher assets.
D. The debt ratio is one measure of financial risk.
E. Lower financial leverage involves lower risk.
10. At the end of the current year, Norman Company reported total
liabilities of $300,000 and total equity of $100,000. The company's debt
ratio on the last year-end was:
A. 300%.
B. 33.3%
C. 75.0%.
D. $400,000.
E. Cannot be determined from the information provided.
END OF CHAPTER 2

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ANALYZING AND RECORDING

© 2009 The McGraw-Hill Companies, Inc.,

$17,900 + $0 + $4,000 + $23,000 = $0 + $43,000 + $1,900

Record relevant transactions

The chart of accounts is a list of all accounts and includes an

DEBITS AND CREDITS

Finding account balances

ASSETS LIABILITIES EQUITIES

Debit Credit Debit Credit Debit Credit

Owner’s Owner's Revenues Expenses

Debit Credit Debit Credit Debit Credit Debit Credit

ACCOUNT NAME: ACCOUNT No. GENERAL JOURNAL Page 123

Step 4: Post entry to ledger Step 3: Record journal entry

BALANCE COLUMN ACCOUNT

POSTING JOURNAL ENTRIES

1 Identify the debit account in ledger.

CASH ACCOUNT No. 101

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000.00 ########

POSTING JOURNAL ENTRIES

2 Enter the date.

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000.00 ########

POSTING JOURNAL ENTRIES

3 Enter the amount and description.

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000 (20,000)

POSTING JOURNAL ENTRIES

4 Enter the journal reference.

CASH ACCOUNT No. 101

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000 (20,000)

POSTING JOURNAL ENTRIES

5 Compute the balance.

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000 (20,000)

POSTING JOURNAL ENTRIES

6 Enter the ledger reference.

CASH ACCOUNT No. 101

Date Description PR Debit Credit Balance

Dec. 3 Purchased equipment G1 20,000 (20,000)

Date Account Titles and Explanation P.R. Debit Credit

Aug 1 Cash 14,250

4. Unearned revenues are:

6. A list of all accounts and the identification number assigned

8. Of the following accounts, the one that normally has a credit

10. On September 30, the Cash account of Value Company had a

Make sure the trial Re-compute each

Make sure account Verify that each journal

See if debit or credit Verify that each original

Accounts receivable 115

Accounts payable 106

Total 222 372

The difference of 150 is divided by 2 to provide the amount of 75.

Accounts receivable 115

Accounts payable 106

Total 297 297

Statement of Owner’s Equity

C. Taylor, Capital $ 33,270