Explanation MEMO FROM: XYZ TO: ABC Dated: 1 st December, 2017 Re: Explaining and illustrating the recording process Dear Sir, As you know any business transaction need to be analyzed to know the nature of the transaction, and to identify the account to be debited, and credited for recording process, similarly the transactions occurred in March 15 for billing the customer, and paying the employees should also go through the process before it is being recorded in journal, and ledger account of the Company K. For first transaction of billing the customer for $6,000 for the home cleaning services, following process are followed; Basic Analysis: In this transaction Accounts receivable (asset) is increased, hence it should be debited for $6,000. Service revenue (stockholders’ equity) is also increased, and there by Stockholders’ equity is increased hence it should be credited for $6,000. Accounting Equation Analysis: { Accounts Receivable + ( Assets − $ 6 , 000 ) } = Liabilities + { Service revenue + ( Stockholders' Equity − $ 6 , 000 ) } Debit and Credit Analysis: In this transaction an asset (Accounts receivable) is increased, hence it should be debited $6,000, similarly the stockholders’ equity is increased hence it should be credited $6,000. Journal Entry : Date Account Title and Explanation Post Ref. Debit ($) Credit ($) Mar.15 Accounts Receivable 6,000 Service Revenue 6,000 (To record the billing customers for service rendered on account) Posting: Accounts Receivable Mar.15 $6,000 Service Revenue Mar

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Chapter 3 Solutions

FINANCIAL ACCOUNTING: TOOLS LL W/ ACCES

Ch. 3 - Prob. 1Q Ch. 3 - Can a business enter into a transaction that...Ch. 3 - Are the followingevents recorded in the accounting...Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Misty Reno, a beginning accounting student,...Ch. 3 - Prob. 9Q Ch. 3 - What is the normal balance for each of these...

Ch. 3 - Prob. 11Q Ch. 3 - Prob. 12Q Ch. 3 - Prob. 13Q Ch. 3 - Prob. 14Q Ch. 3 - Prob. 15Q Ch. 3 - (a) When entering a transaction in the journal,...Ch. 3 - (a) Should accounting transaction debits and...Ch. 3 - Journalize these accounting transactions. (a)...Ch. 3 - Prob. 19Q Ch. 3 - Prob. 20Q Ch. 3 - Prob. 21Q Ch. 3 - Prob. 22Q Ch. 3 - Prob. 3.1BE Ch. 3 - For each of the following accounts, indicate the...Ch. 3 - Prob. 3.6BE Ch. 3 - Prob. 3.7BE Ch. 3 - Prob. 3.9BE Ch. 3 - Tilton Corporation has the following transactions...Ch. 3 - Prob. 3.11BE Ch. 3 - Selected transactions for Montes Company are...Ch. 3 - Prob. 3.1DIE Ch. 3 - Prob. 3.2DIE Ch. 3 - Prob. 3.3DIE Ch. 3 - Prob. 3.4DIE Ch. 3 - Prob. 3.1E Ch. 3 - Prob. 3.6E Ch. 3 - Prob. 3.7E Ch. 3 - Prob. 3.8E Ch. 3 - Prob. 3.9E Ch. 3 - Prob. 3.10E Ch. 3 - Prob. 3.11E Ch. 3 - Prob. 3.12E Ch. 3 - Prob. 3.15E Ch. 3 - Prob. 3.20E Ch. 3 - Prob. 3.23E Ch. 3 - Prob. 3.1AP Ch. 3 - Prob. 3.4AP Ch. 3 - Prob. 3.11AP Ch. 3 - Prob. 3.2EYCT Ch. 3 - Prob. 3.3EYCT Ch. 3 - Prob. 3.4EYCT Ch. 3 - Prob. 3.7EYCT Ch. 3 - Prob. 3.8EYCT Ch. 3 - Prob. 3.9EYCT Ch. 3 - Prob. 3.11EYCT Ch. 3 - Prob. 3.1IFRS

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