Chapter 2, Problem 2.7SE

1.

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

• Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
• Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions of KWO Dispensary

2.

To determine

Account: A record which documents or records the changes in assets, liabilities, or equity for a particular period is referred to as an account.

T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this account is known as debit, and the right hand side is known as credit.

To post: journal entries of KWO Dispensary into the T-accounts