Explanation Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and equities. Credit, all increase in liabilities, revenues, and equities, all decrease in assets, and expenses. 1. Prepare journal entries to record the receipt of the dividend: Journal Date Account Title and Explanation Post Debit Credit Ref. ($) ($) November 1, 2015 Cash 40,000 Long-Term Investments-ORD ( $100,000 × 40 100 ) 40,000 (To record the receipt of the dividend) Table (1) Cash is an asset account and it increases the value of asset by $40,000. Therefore, debit cash account for $40,000

Principles of Financial Accounting, Chapters 1-17 - With Access (Looseleaf)

22nd Edition

ISBN: 9781259582394

Author: Wild

Publisher: MCG

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Principles of Financial Accounting, Chapters 1-17 - With Access (Looseleaf)

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