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Chapter 2: Q2SE (page 91)

Identifying increases and decreases in accounts For each account, identify whether the changes would be recorded as a debit (DR) or credit (CR). a. Increase to Accounts Receivable b. Decrease to Unearned Revenue c. Decrease to Cash d. Increase to Interest Expense e. Increase to Salaries Payable f. Decrease to Prepaid Rent g. Increase to Common Stock h. Increase to Notes Receivable i. Decrease to Accounts Payable j. Increase to Interest Revenue

Short Answer

Expert verified

Identification of debit or credit

Changes	Debit or Credit
Increase to Accounts Receivable	Debit (Dr)
b. Decrease to Unearned Revenue	Debit (Dr)
c. Decrease to Cash	Credit (Cr)
d. Increase to Interest Expense	Debit (Dr
e. Increase to Salaries Payable	Credit (Cr)
f. Decrease to Prepaid Rent	Credit (Cr)
g. Increase to Common Stock	Credit (Cr)
h. Increase to Notes Receivable	Debit (Dr)
i. Decrease to Accounts Payable	Debit (Dr)
j. Increase to Interest Revenue	Credit (Cr)

Step by step solution

01

Definition of Accounts Receivables

The Accounts receivables are defined as the balance sheet item representing any amount owed to the business.

02

Changes recorded as debited when

An account isdebitedwhen there is an increase in assets, expenses and a decrease in capital, revenues, and liabilities.

03

Changes recorded as credited when

An account is credited when there is a decrease in assets, expenses and an increase in capital, revenues, and liabilities.

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Most popular questions from this chapter

Question: Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Vince York practices medicine under the business title Vince York, M.D. During July, the medical practice completed the following transactions:

Jul. 1 York contributed \(63,000 cash to the business in exchange for common stock.

5 Paid monthly rent on medical equipment, \)510.

9 Paid \(23,000 cash to purchase land to be used in operations.

10 Purchased office supplies on account, \)1,600.

19 Borrowed \(22,000 from the bank for business use.

22 Paid \)1,100 on account.

28 The business received a bill for advertising in the daily newspaper to be paid in August, \(240.

31 Revenues earned during the month included \)6,400 cash and \(6,000 on account.

31 Paid employees’ salaries \)2,200, office rent \(1,900, and utilities \)560. Record as a compound entry.

31 The business received \(1,120 for medical screening services to be performed next month.

31 Paid cash dividends of \)7,200.

The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.

Requirements 3. Prepare the trial balance of Vince York, M.D., as of July 31, 2018.

Question: Calculating the debt ratio

John Hart, M.D., reported the following trial balance as of September 30, 2018:

Account Title Office Supplies Cash Debit Credit Accounts Receivable Office Equipment Land Building Accounts Payable Utilities Payable Unearned Revenue Notes Payable Advertising Expense Utilities Expense Salaries Expense Service Revenue Dividends Common Stock Total Balance \( 256,700 \) 1,600 24,795 69,000 50,505 110,000 200 \( 30,000 \) 256,700 29,000 23,500 1,100 57,000 7,900 3,000 30,000 75,000 800 J

Calculate the debt ratio for John Hart, M.D

What is the calculation for the debt ratio? Explain what the debt ratio evaluates.

Question:The accounts of Anderson Moving Company follow with their normal balances as of August 31, 2018. The accounts are listed in no particular order. Common Stock \( 49,800 Trucks \) 123,000 Insurance Expense 600 Fuel Expense 1,000 Accounts Payable 4,000 Dividends 5,600 Service Revenue 82,000 Utilities Expense 300 Building 41,000 Accounts Receivable 10,000 Advertising Expense 200 Notes Payable 56,000 Salaries Expense 6,000 Office Supplies 100 Cash 4,000 Prepare Anderson’s trial balance as of August 31, 2018.

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions:

Nov. 1 Received \(41,000 cash and issued common stock to Stewart.

4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account.

6 Performed services for a law firm and received \)2,100 cash.

7 Paid \(27,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the \)800 within one week.

14 Paid for the furniture purchased on November 4 on account.

15 Paid assistant’s semimonthly salary, \(1,470.

17 Received cash on account, \)500.

20 Prepared a design for a school on account, \(680.

25 Received \)1,900 cash for design services to be performed in December.

28 Received \(3,100 cash for consulting with Plummer & Gordon.

29 Paid \)840 cash for a 12-month insurance policy starting on December 1.

30 Paid assistant’s semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650.

30 Received a bill for utilities, \(650. The bill will be paid next month.

30 Paid cash dividends of \)2,800.b

Requirements 4. Prepare the trial balance of Beth Stewart, Designer, as of November 30, 2018.

See all solutions

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