E2.2 (LO 1) Selected transactions for M. Acosta, an interior decorator, in her first month of business, are as follows. Jan. 2 Invested $10,000 cash in business. 3 Purchased used car for $3,000 cash for use in business. 9 Purchased supplies on account for $600. 11 Billed customers $2,400 for services performed. Paid $350 cash for advertising. 16 20 Received $900 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Withdrew $1,000 cash for personal use by owner. Instructions For each transaction, indicate the following. a. The basic type of account debited and credited (asset, liability, owner's equity). b. The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.). c. Whether the specific account is increased or decreased. d. The normal balance of the specific account. Use the following format, in which the January 2 transaction is given as an example. Date Jan. 2 (a) Basic Type Asset Account Debited (b) Specific Account Cash (c) (d) Normal Balance Effect Increase Debit Account Credited (c) (b) Specific Account Effect (a) Basic Type Owner's Owner's Increase (d) Normal Balance Credit Identify debits, credits, and norma balances.
E2.2 (LO 1) Selected transactions for M. Acosta, an interior decorator, in her first month of business, are as follows. Jan. 2 Invested $10,000 cash in business. 3 Purchased used car for $3,000 cash for use in business. 9 Purchased supplies on account for $600. 11 Billed customers $2,400 for services performed. Paid $350 cash for advertising. 16 20 Received $900 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Withdrew $1,000 cash for personal use by owner. Instructions For each transaction, indicate the following. a. The basic type of account debited and credited (asset, liability, owner's equity). b. The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.). c. Whether the specific account is increased or decreased. d. The normal balance of the specific account. Use the following format, in which the January 2 transaction is given as an example. Date Jan. 2 (a) Basic Type Asset Account Debited (b) Specific Account Cash (c) (d) Normal Balance Effect Increase Debit Account Credited (c) (b) Specific Account Effect (a) Basic Type Owner's Owner's Increase (d) Normal Balance Credit Identify debits, credits, and norma balances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:E2.2 (LO 1) Selected transactions for M. Acosta, an interior decorator, in her first month of business,
are as follows.
Jan. 2 Invested $10,000 cash in business.
3
9
16838
11
Purchased used car for $3,000 cash for use in business.
Purchased supplies on account for $600.
Billed customers $2,400 for services performed.
Paid $350 cash for advertising.
20
Received $900 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Withdrew $1,000 cash for personal use by owner.
Instructions
For each transaction, indicate the following.
a. The basic type of account debited and credited (asset, liability, owner's equity).
b. The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.).
c. Whether the specific account is increased or decreased.
d. The normal balance of the specific account.
Use the following format, in which the January 2 transaction is given as an example.
(a)
Basic
Date
Type
Jan. 2 Asset
Account Debited
(b)
Specific
Account
(c)
Effect
Cash Increase Debit Owner's
Equity
(d)
(a)
Normal Basic
Balance Type
Account Credited
(c)
(b)
Specific
Account
Owner's
Capital
Effect
Increase
(d)
Normal
Balance
Credit
Identify debits, credits, and normal
balances.
Transcribed Image Text:E2.1 (LO 1) Kim Yi has prepared the following list of statements about accounts.
1. An account is an accounting record of either a specific asset or a specific liability.
2. An account shows only increases, not decreases, in the item it relates to.
3. Some items, such as Cash and Accounts Receivable, are combined into one account.
4. An account has a left, or credit side, and a right, or debit side.
5. A simple form of an account consisting of just the account title, the left side, and the right side, is
called a T-account.
Instructions
Identify each statement as true or false. If false, indicate how to correct the statement.
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