Identify the option which is according to the rules of debit and credit for balance sheet accounts.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

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Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments General Factory Receiving Assembly Finishing Direct overhead $400,000 $150,000 $45,000 $71,000 Square footage 2,700 5,400 5,400 Number of receiving orders 300 1,680 1,020 Direct labor hours 25,000 40,000 Required: 1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".) Allocation ratios: Square footage General Factory Receiving Assembly Finishing 0 0 Number of receiving orders 0.10 0 0.56 0.34 Allocations: Direct overhead cost General Factory Receiving Total General Factory Receiving Assembly Finishing $ $ $ $ 400,000 150,000 45,000 71,000 $ $ $ $ 2. Using direct labor hours, compute departmental overhead…

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Windsor Fabrication estimates its manufacturing overhead to be $720,000 and its direct labor costs to be $600,000 for year 5. Windsor worked three jobs for the year. Job 5-1, which was sold during year 5, had actual direct labor costs of $180,000. Job 5-2, which was completed but not sold at the end of the year, had actual direct labor costs of $270,000. Job 5-3, which is still in work-in-process inventory, had actual direct labor costs of $150,000. The actual manufacturing overhead for year 5 was $700,000. Manufacturing overhead is applied on the basis of direct labor costs. a) How much overhead was applied to each job in year 5? b) What was the over- or underapplied manufacturing overhead for year 5?

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

Answer 6

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.

Answer 7

Chapter 3, Problem 1STQ

To determine

Identify the option which is according to the rules of debit and credit for balance sheet accounts.

Answer 8

Expert Solution & Answer

Explanation of Solution

Journal entry:

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

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Justification for Incorrect answers:

Option a:

Increase in liability and owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Option b:

Decrease in liability accounts are recorded by debits. Hence, this is the incorrect answer.

Option c:

Increase in owners’ equity accounts are recorded by credits. Hence, this is the incorrect answer.

Justification for Correct answers:

When liability and owners’ accounts are decreased, they are recorded by debits. Hence, the option which is correct is Option d. Decreases in liability and owners’ equity accounts are recorded by debits.