Explanation Expenses: Expenses refer to the cost incurred on the necessary purchases of the fixed assets by the firm, or the production of the goods and services and operating the business activities to earn revenue during the particular accounting period. Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system. e. Record the journal entry for providing bowling merchandise inventory. Date Accounts title and explanation Ref. Debit ($) Credit ($) Cost of goods sold(+E)(-SE) 6,800 Inventory (-A) 6,800 (To record the journal entry for providing bowling merchandise inventory) Table (1) Cost of goods sold is an expense account which is a component of stockholders’ equity . There is an increase in the expense account which decreases the stockholders’ equity account. Hence, debit cost of goods sold account with $6,800. Inventory is an asset. There is a decrease in the asset. Hence, credit inventory account with $6,800. f. Record the journal entry for payment of electricity bill. Date Accounts title and explanation Ref. Debit ($) Credit ($) Accounts payable (-L) 800 Cash (-A) 800 (To record the payment of electricity bill) Table (2) Accounts payable is a liability. There is a decrease in the liability. Hence, debit accounts payable account with $800. Cash is an asset. There is a decrease in the asset. Hence, credit cash account with $800. g. Record the journal entry for payment of wages to employees. Date Accounts title and explanation Ref. Debit ($) Credit ($) Wages expenses (+E) (-SE) 3,500 Cash (-A) 3,500 (To record the wage expenses) Table (3) Wages expenses are an expense account which is a component of stockholders’ equity. There is an increase in the expense account which decreases the stockholders’ equity account. Hence, debit wages expenses account with $3,500. Cash is an asset. There is a decrease in the asset. Hence, credit Cash account with $4,000...

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ISBN: 9781259738692

Author: Libby

Publisher: MCG

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Record the journal entries for the transactions that are related to expenses.

Solution Summary: The author explains journaling as the method of recording monetary business transactions in chronological order.

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