MUTIPLE CHOICE:
Câu 1: B
Câu 2: C
Câu 3: D
Câu 4: B
Câu 5: D
Câu 6: A
Câu 7: C
Câu 8: D
Câu 9: A
Câu 10: C
EXERCISES
2.2
1. Prepaid Insurance – Debit
2. Accounts Pâyble – Credit
3. Land – Debit
4. Service Revenue – Credit
5. Utilities Expense – Debit
6. Owner’s Capital – Credit
7. Equipment – Debit
8. Salaries Expend – Debit
9. Supplies – Debit
10. Unearned Revenue – Credit
2.3
1. Accounts Receivable
(a) Asset
(b) Normal Debit Balance
2. Rent Expense
(a) Expense (part of Owner’s Equity)
(b) Normal Debit Balance
3. B. Damji, Drawings
(a) Owner’s Equity (Contra Equity)
(b) Normal Debit Balance
4. Supplies
(a) Asset
(b) Normal Debit Balance
5. Unearned Revenue
(a) Liability
(b) Normal Credit Balance
6. Service Revenue
(a) Owner’s Equity (Revenue)
(b) Normal Credit Balance
7. Prepaid Insurance
(a) Asset
(b) Normal Debit Balance
8. Notes Payable
(a) Liability
(b) Normal Credit Balance
BE2.5
1. Accounts Payable
○ (a) Normal Balance: Credit
○ (b) Effect of Debit: Decreases
○ (c) Effect of Credit: Increases
2. Supplies
○ (a) Normal Balance: Debit
○ (b) Effect of Debit: Increases
○ (c) Effect of Credit: Decreases
3. J. Takamoto, Capital
○ (a) Normal Balance: Credit
○ (b) Effect of Debit: Decreases
○ (c) Effect of Credit: Increases
4. J. Takamoto, Drawings
○ (a) Normal Balance: Debit
○ (b) Effect of Debit: Increases
○ (c) Effect of Credit: Decreases
5. Prepaid Rent
○ (a) Normal Balance: Debit
○ (b) Effect of Debit: Increases
○ (c) Effect of Credit: Decreases
6. Utilities Expense
○ (a) Normal Balance: Debit
○ (b) Effect of Debit: Increases
○ (c) Effect of Credit: Decreases
7. Service Revenue
○ (a) Normal Balance: Credit
○ (b) Effect of Debit: Decreases
○ (c) Effect of Credit: Increases
8. Unearned Revenue
○ (a) Normal Balance: Credit
○ (b) Effect of Debit: Decreases
○ (c) Effect of Credit: Increases
BE2.6
1. Increase in D. Parmelee, Capital
● (a) Account Type: Owner’s Equity
● (b) Record with: Credit
2. Decrease in Cash
● (a) Account Type: Asset
● (b) Record with: Credit
3. Decrease in Notes Payable
● (a) Account Type: Liability
● (b) Record with: Debit
4. Increase in Rent Expense
● (a) Account Type: Expense (typically classified within Owner’s Equity as it reduces equity)
● (b) Record with: Debit
5. Increase in D. Parmelee, Drawings
● (a) Account Type: Owner’s Equity (Drawings account)
● (b) Record with: Debit
6. Increase in Equipment
● (a) Account Type: Asset
● (b) Record with: Debit
7. Increase in Accounts Payable
● (a) Account Type: Liability
● (b) Record with: Credit
8. Increase in Service Revenue
● (a) Account Type: Owner’s Equity (Revenue increases equity)
● (b) Record with: Credit
BE2.7
Transaction 1:
● Basic Analysis: The asset account Cash is decreased by $439. The asset account Supplies is
increased by $439.
● Debit/Credit Analysis:
○ Debit Supplies $439 (increases asset)
○ Credit Cash $439 (decreases asset)
Transaction 2:
● Basic Analysis: The asset account Accounts Receivable is increased by $1,020. The revenue
account Service Revenue is increased by $1,020.
● Debit/Credit Analysis:
○ Debit Accounts Receivable $1,020 (increases asset)
○ Credit Service Revenue $1,020 (increases revenue)
Transaction 3:
● Basic Analysis: The asset account Equipment is increased by $2,230. The liability account
Accounts Payable is increased by $2,230.
● Debit/Credit Analysis:
○ Debit Equipment $2,230 (increases asset)
○ Credit Accounts Payable $2,230 (increases liability)
Transaction 4:
● Basic Analysis: The asset account Cash is decreased by $293. The expense account Utilities
Expense is increased by $293.
● Debit/Credit Analysis:
○ Debit Utilities Expense $293 (increases expense)
○ Credit Cash $293 (decreases asset)
Transaction 5:
● Basic Analysis: The asset account Cash is increased by $750. The revenue account Service
Revenue is increased by $750.
● Debit/Credit Analysis:
○ Debit Cash $750 (increases asset)
○ Credit Service Revenue $750 (increases revenue)
Transaction 6:
● Basic Analysis: The asset account Cash is increased by $7,100. The liability account
Unearned Revenue is increased by $7,100.
● Debit/Credit Analysis:
○ Debit Cash $7,100 (increases asset)
○ Credit Unearned Revenue $7,100 (increases liability)
BE2.8
Aug. 4
● Account Debited
○ (a) Basic Type: Asset
○ (b) Specific Account: Prepaid Rent
○ (c) Effect: +$4,720
● Account Credited
○ (a) Basic Type: Asset
○ (b) Specific Account: Cash
○ (c) Effect: -$4,720
Aug. 5
● Account Debited
○ (a) Basic Type: Asset
○ (b) Specific Account: Office Supplies
○ (c) Effect: +$625
● Account Credited
○ (a) Basic Type: Liability
○ (b) Specific Account: Accounts Payable
○ (c) Effect: +$625
Aug. 6
● Account Debited
○ (a) Basic Type: Asset
○ (b) Specific Account: Cash
○ (c) Effect: +$560
● Account Credited
○ (a) Basic Type: Owner’s Equity
○ (b) Specific Account: Service Revenue
○ (c) Effect: +$560
Aug. 17
● Account Debited
○ (a) Basic Type: Asset
○ (b) Specific Account: Accounts Receivable
○ (c) Effect: +$1,210
● Account Credited
○ (a) Basic Type: Owner’s Equity
○ (b) Specific Account: Service Revenue
○ (c) Effect: +$1,210
Aug. 27
● Account Debited
○ (a) Basic Type: Expense
○ (b) Specific Account: Salary Expense
○ (c) Effect: +$980
● Account Credited
○ (a) Basic Type: Asset
○ (b) Specific Account: Cash
○ (c) Effect: -$980
Aug. 29
● Account Debited
○ (a) Basic Type: Owner’s Equity
○ (b) Specific Account: Drawings (Barbara Fleming, Drawings)
○ (c) Effect: +$720
● Account Credited
○ (a) Basic Type: Asset
○ (b) Specific Account: Cash
○ (c) Effect: -$720
BE2.9
June 1 transaction: example
June 2 transaction
Basic Analysis : The assets equipment increased $2,620. The liabilitiy account A.P is increased by
$2,620.
Debit/credit Analisis:debit increase assets: debit equipment 2,620
credit increase liability: credit A.P 2,620
Journal entry: June 2 equipment 2,620, A.P 2,620
Bought used welding equipment on account
June 5 transaction
Basic Analysis
No transaction occurred; only an employee was hired with a future commitment for salary.
Debit/Credit Analysis
No journal entry required since no financial transaction took place.
Journal Entry
(No entry)
June 17 transaction
Basic Analysis
The asset account Accounts Receivable is increased by $2,500. The owner’s equity account Service
Revenue is increased by $2,500.
Debit/Credit Analysis
Debits increase assets: debit Accounts Receivable $2,500.
Credits increase owner’s equity: credit Service Revenue $2,500.
Journal Entry
June 17
Accounts Receivable 2,500
Service Revenue 2,500
Billed R. Windl for welding work done.
June 27 transaction
Basic Analysis
The asset account Cash is increased by $1,190. The asset account Accounts Receivable is decreased
by $1,190.
Debit/Credit Analysis
Debits increase assets: debit Cash $1,190.
Credits decrease assets: credit Accounts Receivable $1,190.
Journal Entry
June 27
Cash 1,190
Accounts Receivable 1,190
Received cash from R. Windl for work billed.
BE2.10
October 1
Debit: Cash $30,000
Credit: Owner's Equity $30,000
October 2
Debit: Rent Expense $700
Credit: Cash $700
October 3
Debit: Office Equipment $2,800
Credit: Accounts Payable $2,800
October 6
Debit: Accounts Receivable $4,400
Credit: Service Revenue $4,400
October 27
Debit: Accounts Payable $1,100
Credit: Cash $1,100
October 30
Debit: Utilities Expense $130
Credit: Accounts Payable $130
BE2.11
Journal Entries
Office Supplies Purchase
Date: August 31
Debit: Supplies $439
Credit: Cash $439
(To record the purchase of office supplies)
Services Billed
Date: August 31
Debit: Accounts Receivable $1,020
Credit: Service Revenue $1,020
(To record services provided on account)
Equipment Purchase on Account
Date: August 31
Debit: Equipment $2,230
Credit: Accounts Payable $2,230
(To record equipment purchased on account)
Utility Bill Payment
Date: August 31
Debit: Utilities Expense $293
Credit: Cash $293
(To record payment of the utility bill)
Cash Received for Services
Date: August 31
Debit: Cash $750
Credit: Service Revenue $750
(To record cash received for services provided)
Cash Received for Future Services
Date: August 31
Debit: Cash $7,100
Credit: Unearned Revenue $7,100
(To record cash received for services to be provided in the next month)
BE 2.11
Aug. 1
Debit: Cash $17,970
Credit: Owner’s Capital (Barbara Fleming) $17,970
Description: Owner invested cash in the business.
Aug. 4
Debit: Prepaid Rent $4,720
Credit: Cash $4,720
Description: Paid rent in advance for three months.
Aug. 5
Debit: Office Supplies $625
Credit: Accounts Payable $625
Description: Purchased office supplies on account.
Aug. 6
Debit: Cash $560
Credit: Service Revenue $560
Description: Received cash from clients for services provided.
Aug. 17
Debit: Accounts Receivable $1,210
Credit: Service Revenue $1,210
Description: Billed clients for services provided.
Aug. 27
Debit: Salary Expense $980
Credit: Cash $980
Description: Paid secretary’s salary.
Aug. 29
Debit: Owner’s Drawings $720
Credit: Cash $720
Description: Paid cash to the owner for personal use.
BE2.13
Jan. 2
Debit: Cash $10,000
Credit: Owner’s Capital $10,000
Description: Owner invested cash in the business.
Jan. 3
Debit: Vehicle $3,000
Credit: Cash $3,000
Description: Purchased a used car for business use.
Jan. 9
Debit: Supplies $600
Credit: Accounts Payable $600
Description: Purchased supplies on account.
Jan. 11
Debit: Accounts Receivable $2,400
Credit: Service Revenue $2,400
Description: Billed customers for services performed.
Jan. 16
Debit: Advertising Expense $350
Credit: Cash $350
Description: Paid cash for advertising.
Jan. 20
Debit: Cash $900
Credit: Accounts Receivable $900
Description: Received cash from customers previously billed.
Jan. 28
Debit: Owner’s Drawings $1,000
Credit: Cash $1,000
Description: Owner withdrew cash for personal use.
BE 2.14
DATE DESCRIPTION DEBIT CREDIT BALANCE
APRIL 1 Beginning Balance $1,600
APRIL 3 Service Revenue $3,400 $5,000
APRIL 16 Rent Expense $700 $4,300
APRIL 20 Salaries Expense $250 $4,050
BE 2.15
Account Receivable:
Date Debit Credit
Sept.2 4400
Sept.4 2400
Sept.8 1325
Ending Balance: 4400- 2400 - 1325 = 675 (Debit)
Service Revenue:
Date Debit Credit
Sept.2 4400
Sept.10 3000
Ending Balance: 4400 + 3000 = 7400 (Credit)
Cash:
Date Debit Credit
Sept.4 2400
Sept.10 3000
Sept.28 1325
Ending Balance: 2400 + 3000 + 1325 = 6725
Summary of Ending Balances
Accounts Receivable: 675 (Debit)
Service Revenue: 7,400 (Credit)
Cash: 6,725 (Debit)
BE 2.16
Account Debit Credit
Cash 5800
Accounts Receivable 3000
Equipment 17000
Owner’ Drawings 1200
Salaries Expense 5100
Rent Expense 1000
Accounts Payable 8100
Owner’s Capital 15000
Service Revenue 10000
Total 33100 33100
BE 2.17
Account Debit Credit
Cash 6400
Account Receivable 5000
Prepaid Rent 800
Supplies 650
Equipment 14600
Rent Expense 4500
Salaries Expense 1000
Drawings 1100
Account Payable 3300
Unearned Revenue 250
C.Pettipas, Capital 22500
Service Revenue 8800
Total 34050 34050
P2.8B
a)
accounts payable
Cash -4,245 A-Cr
A.C -4,245 L-Dr
=> Cr cash 4,245
Dr A.P 4,245
Accounts receivable
Cash +2,110 A+Dr
A.R -2,110 L-Cr
=> Dr cash 2,110
Cr A.R 2,110
Expense
Cash -829,701 A-Cr
Advertising expense +1,265 OE-Dr
Insurance expense +3,388 OE-Dr
Rent expense +5,775 OE-Dr
Salaries expense +6,310 OE-Dr
Service expense +47,963 OE-Dr
Unearned expense +765 OE-Dr
=> Cr cash 829,701
Dr Advertising expense 1,265
Dr Insurance expense 3,388
Dr Rent expense 5,775
Dr Salaries expense 6,310
Dr Service expense 47,963
Dr Unearned expense 765
Equiment
Cash -17,730 A-Cr
Equiment +17,730 L+Dr
=> Cr cash 17,730
Dr equiment 17,730
Insurance expense
Cash -3,388 A-Cr
Insurance expense +3,388 L-Dr
=> Cr cash 3,388
Dr Insurance expense 3,388
Capital
Cash +19,300 A+Dr
Capital +19,300 L+Cr
=> Dr Cash 19,300
Cr Capital 19,300
Drawings
Cash -31,190 A-Cr
Drawings -31,190 L-Dr
=> Cr cash 31,190
Dr drawings 31,190
Supplies
Cash -1,340 A-Cr
Supplies +1,340 A+Dr
=> Cr cash 1,340
Dr Supplies 1,340
b)
Assets = Liabilities + Owner’s Equity
EquationCash + Equipment + Supplies = Accountpayble +Owner’s capital + Revenues -
AnalysisExpense
1 -$1,795 +3,270 +$2.000 -
1,795
4 +$1,880 +$1,880
7 -$308 -$308
8 -$135 +$135
10 -$2,140 -
$2,140
12 +$765
20 +$3,480 +$3,480
21 -$115 -$115
24 -$2,860 -$2,860
28
29 +$560 +$560
30 -$655 -$655
31 -$160 -$160
Sum -$1,483 +$3,270 +$135 = +$1,840 -$2,860 +$5,360 -
$4,453
Sum +$1,922 = +$1,922
c)
Cash -1,795 A-Cr
Equiment -1,795 L+Dr
=> Cr cash 1,795
Dr E 1,795
Cash +1,880 A+Dr
Revenue -1,880 L-Cr
=> Dr cash 1,880
Cr Revenue 1,880
Cash +308 A+Dr
Expense +308 OE-Cr
Cash -135 A-Cr
Supplies +135 L+Dr
=> Cr cash 135
Dr supplies 135
10
Cash -2,140 A-Cr
A.P +2,140 L-Dr
=> Cr cash 2,140
Dr A.P 2,140
12
Cash +765 A+Dr
Capital +765 L+Cr
=> Dr Cash 765
Cr Capital 765
20
Cash -3,480 A-Cr
Sevices expense +3,480 OE+Dr
=> Cr cash 3,480
Dr S.E 3,480
24
Cash +19,300 A+Dr
Capital +19,300 L+Cr
=> Dr Cash 19,300
Cr Capital 19,300
31
Cash -31,190 A-C
N.P -31,190 L-Dr
=> Cr cash 31,190
Dr N.P 31,190
e)
Income statement
Month end december 31, 2021
Revenues
Service revenue 47,963
Expenses
Monthly expense 308
Salaries expense 655
Total expenses 963
Profit 47,000
f)
Statement of owner’s equity
Month ended december 31, 2021
Capital, december 1, 2021 0
Add: Investments 0
Profit 47,000
47,000
Less: Drawings 2,860
Equity, december 31, 2021 1,922
g)
Balance sheet
december 31, 2021
Assets
Cash -1,483
Supplies 135
Equiment 3,270
Total assets 1,922
Liabilities
Accounts payable 0
Owner’s equity
Equity 1,922
Total liabilities and owner’s equity 1,922
BE2-2
a)
Date Account title Dr Cr
1 Cash $4000
$4000
2 Equiment $1200
$1200
3 R.E $800
$800
12 A.R $300
$300
b)
1
Cash +4000 A-Cr
Rent expense -800 L+Dr
Revenue +300 O.E+Cr
=> Cr cash 4000
Dr rent expense 1200
Cr revenue 300
Cash -1200 A-Cr
Equiment +1200 L+Dr
=> Cr cash 1200
Dr equiment 1200
Cash -800 A-Cr
Rent expense -800 OE-Dr
=> Cr cash 800
Dr rent expense 800
12
Cash +300 A+Dr
Revenue +300 L+Cr
=> Dr Cash 300
Cr revenue 300
c)
Trial banlance
Account title Dr Cr
Cash $3500
Owner capital $4000
Equiment $1200
Liabilities $1200
Rent expense $800
Revenue $300
Sum $5500 $5500
