Explanation Journal: Journal is the book of original entry. Journal consists of the day-to-day financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect. Rules of debit and credit: “An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited. Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”. Chart of Accounts: The purpose of chart of accounts is to identify the particular account with the number assigned to it, to help the business better organize number of accounts used. Any account can be recognized through the short number allocated to it instead of large name of the account. This number is unique to an account to avoid any confusion. a. In this transaction, the common stock is being issued to new investors. Therefore, debit the cash account and credit the common stock account . b. In this transaction, the service is being performed on credit. Therefore, debit the accounts receivable account and credit the service revenue account . c. In this transaction, the supplies arepurchased on credit which is to be used later. Hence, debit the supplies account and credit the accounts payable account . d. In this transaction, the insurance is being paid for the next two years in advance. Hence debit the prepaid insurance account and credit the cash account. e. In this transaction, the building is being purchased partly on account and partly on cash...

5th Edition

ISBN: 9780078025914

Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby

Publisher: McGraw-Hill Education

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 3, Problem 3.1PA

To determine

To indicate: The accounts that should be debited and credited by entering the appropriate account numbers to the right of each transaction.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 3, Problem 3.4CP

Chapter 3, Problem 3.2PA

Students have asked these similar questions

All answer

Financial Accounting Question

Answer this?

Chapter 3 Solutions

Fundamentals of Financial Accounting

Ch. 3 - Prob. 1Q Ch. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...

Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 12Q Ch. 3 - Prob. 13Q Ch. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 17Q Ch. 3 - Which of the following items is not a specific...Ch. 3 - Prob. 2MC Ch. 3 - Prob. 3MC Ch. 3 - Prob. 4MC Ch. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MC Ch. 3 - Prob. 7MC Ch. 3 - Prob. 8MC Ch. 3 - Webby Corporation reported the following amounts...Ch. 3 - Prob. 10MC Ch. 3 - Prob. 3.1ME Ch. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.6ME Ch. 3 - Prob. 3.7ME Ch. 3 - Prob. 3.8ME Ch. 3 - Prob. 3.9ME Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 3.11ME Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.13ME Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Prob. 3.16ME Ch. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 3.18ME Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Prob. 3.22ME Ch. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Prob. 3.1E Ch. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 3.10E Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Prob. 3.13E Ch. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 3.15E Ch. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 3.18E Ch. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 3.2CP Ch. 3 - Prob. 3.3CP Ch. 3 - Prob. 3.4CP Ch. 3 - Prob. 3.1PA Ch. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 3.4PA Ch. 3 - Prob. 3.1PB Ch. 3 - Prob. 3.2PB Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 3.1COP Ch. 3 - SKIL_S DEVELOPMENT CASES Finding Financial...Ch. 3 - Prob. 3.2SDC Ch. 3 - Prob. 3.4SDC Ch. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

To indicate: The accounts that should be debited and credited by entering the appropriate account numbers to the right of each transaction.

Solution Summary: The author explains the purpose of chart of accounts, which consists of the day-to-day financial transactions in a chronological order.

Concept explainers

Videos

To indicate: The accounts that should be debited and credited by entering the appropriate account numbers to the right of each transaction.

Want to see the full answer?

Chapter 3 Solutions