List the classification of each of the following accounts as A (asset), L (liability), OE (owner’s equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
List the classification of each of the following accounts as A (asset), L (liability), OE (owner’s equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
List the classification of each of the following accounts as A (asset), L (liability), OE (owner’s equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side.
PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
Listed below are terms associated with the steps of the accounting processing cycle. Pair each item from List A with the item from List
B that is most appropriately associated with it.
List A
1. Source documents
2. Transaction analysis
3. Journal
4. Posting
5. Unadjusted trial balance
6. Adjusting entries
7. Adjusted trial balance
8. Financial statements
9. Closing entries
10. Post-closing trial balance
List B
The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for
$165,000 (assume Marchetti uses a perpetual inventory system); (2) paid $40,000 in salaries to employees for work performed during
the month; (3) sold inventory on account to customers for $200,000 that had a cost of $120,000; (4) collected $180,000 in cash from
credit customers; and (5) paid on account to suppliers of inventory $145,000.
Analyze each transaction and show the effect of each on the accounting equation for a corporation.
Note: Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.
Assets
GETNE
(3)
(4)
(5)
(1)
(2)
Liabilities
Paid-in capital
+
Retained Earnings
+
+
+
+
+
+
+
+
+
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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