Question 2-11A journal provides a chronological record of all transactions affecting a firm. A journal entry isused to describe the format for recording a transaction.Question 2-12Question 2-13In each journal entry, the sum of all amounts debited equals the sum of all amounts credited.DateDebitCreditAccount Name . . . . . . . . . . . . . . . . . . . . . .AmountAccount Name . . . . . . . . . . . . . . .Amount(Description of transaction)
Chapter 02 - The Accounting Information System2-6Question 2-14(a)DebitCreditCash1,200Service Revenue1,200(Receive cash from providing services)(b)DebitCreditRent Expense500Cash500(Pay rent for the current month)(c)DebitCreditBuilding10,000Notes Payable10,000(Purchase building with note payable)
Chapter 02 - The Accounting Information System2-7answers to Review Questions (continued)Question 2-15(a) Purchase supplies by paying cash of $20,000.(b) Provide services to customer on account for $30,000.(c) Pay cash on accounts payable of $10,000.Question 2-16A T-account is an informal means to show the balance in an account. The left side is referred toas adebitand the right side is referred to as acreditQuestion 2-17Posting isthe process of transferring the debit and credit information from the journal toindividual accounts in the general ledger.(a)SuppliesCash20,00020,000(b) Accounts ReceivableService Revenue30,00030,000(c)Accounts PayableCash10,00010,000.
Chapter 02 - The Accounting Information System2-8Question 2-18The general ledger is the collection of all accounts used to record the company’s transactions.Achart of accounts is a listing of all account names.Question 2-19A trial balance is a list of all accounts and their balances at a particular date. Balance refers to thefact that the sum of the accounts with debit balances should equal the sum of the accounts with creditbalances.Question 2-20Not necessarily. While total debits equaling total credits is a good indication that all accountshave been appropriately accounted for, the accounts could contain offsetting errors. For example, ifone account with a debit (credit) balance is understated by the same amount that another accountwith a debit (credit) balance is overstated, the trial balance will show equal debit and credit totals.BRIEF ExercisesBrief Exercise 2-1Proper order:(c) Use source documents to identify accounts affected by externaltransactions.(d) Analyze the impact of the transaction on the accounting equation.(b) Assess whether the impact of the transaction results in a debit orcredit to the account balance.(f) Record transactions using debits and credits.(a) Post the transaction to the T-account in the general ledger.(e) Prepare a trial balance.
Chapter 02 - The Accounting Information System2-9Brief Exercise 2-2Assets=Liabilities+Stockholders’EquityPossible(Yes/No)(a)Increase=Decrease+No changeNo(Cash ↑)(Accounts Payable ↓)(b)No change=Increase+IncreaseNo(Salaries Payable ↑)(Service Revenues ↑)(c)Decrease=No Change+DecreaseYes(Cash ↓)(Advertising Expense ↑)Brief Exercise 2-3Total AssetsTotal Liabilities andStockholders’ EquityCash$6,200Accounts Payable$1,200Supplies1,600
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