Explanation Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit , all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. Indicate the accounts that would be debited and credited for the given transactions as follows: Table (1) a. Received cash from the issue of common stock: In this transaction, cash and common stock accounts are affected. Cash is an assets account, and issuance of common stock increased the value of cash account. Hence, cash account is debited. Common stock is a component of stockholder’s equity , and it increased the value of common stock account. Hence, common stock is credited. b. Received cash for services to be performed in the future: In this case, cash and unearned revenue accounts are affected. Cash is an assets account, and issuance of common stock increased the value of cash account. Hence, cash account is debited. Unearned service revenue is a liabilities account, and it increased the value of unearned revenue account. Hence, unearned revenue account is credited. c. Paid salaries payable: In this case, salaries payable and cash accounts are affected. Salaries payable is a liabilities account, and it decreased the value of salaries payable account. Hence, salaries payable account is credited. Cash is an assets account, and it decreased the value of cash account. Hence, cash account is credited. d. Provided services on account: In this transaction, accounts receivable and service revenue accounts are affected. Accounts receivable is an assets account, and service provided on account is increased the value of account receivable account. Hence, accounts receivable account is debited. Service revenue is a revenue account, and it increased the value of stockholder’s equity. Hence, service revenue account is credited. e. Paid cash for operating expense: In this transaction, operating expense and cash accounts are affected. Operating expense is an expense account, and it decreased the value of stockholder’s equity. Hence, operating expense account is debited. Cash is an assets account, and cash paid for operating expense decreased the value of cash. Hence, cash account is credited. f. Purchased supplies on account: In this transaction, supplies and accounts payable accounts are affected. Supplies is an assets account, it increased the value of supplies account. Hence, supplies account is debited...

Fundamental Financial Accounting Concepts

10th Edition

ISBN: 9781260159028

Author: Edmonds

Publisher: MCG

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Chapter 3, Problem 5AE

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Indicate the accounts that would be debited and credited for the given transactions.

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Chapter 3, Problem 4AE

Chapter 3, Problem 6AE

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What is the primary purpose of a trial balance? A) To determine net income or lossB) To check if the accounting equation is balancedC) To ensure that total debits equal total creditsD) To provide the final financial statements

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Davidson Corporation owns a non-depreciable capital asset held for investment.

Chapter 3 Solutions

Fundamental Financial Accounting Concepts

Ch. 3 - Prob. 1Q Ch. 3 - Prob. 2Q Ch. 3 - Prob. 3Q Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Prob. 8Q Ch. 3 - Prob. 9Q Ch. 3 - Prob. 10Q

Ch. 3 - Prob. 11Q Ch. 3 - Prob. 12Q Ch. 3 - Prob. 13Q Ch. 3 - Prob. 14Q Ch. 3 - Prob. 15Q Ch. 3 - Prob. 16Q Ch. 3 - Prob. 17Q Ch. 3 - Prob. 18Q Ch. 3 - Prob. 19Q Ch. 3 - Prob. 20Q Ch. 3 - Prob. 21Q Ch. 3 - Prob. 22Q Ch. 3 - Prob. 1AE Ch. 3 - Prob. 2AE Ch. 3 - Prob. 3AE Ch. 3 - Prob. 4AE Ch. 3 - Prob. 5AE Ch. 3 - Prob. 6AE Ch. 3 - Prob. 7AE Ch. 3 - Prob. 8AE Ch. 3 - Prob. 9AE Ch. 3 - Prob. 10AE Ch. 3 - Prob. 11AE Ch. 3 - Prob. 12AE Ch. 3 - Prob. 13AE Ch. 3 - Prob. 14AE Ch. 3 - Prob. 15AE Ch. 3 - Prob. 16AE Ch. 3 - Prob. 17AE Ch. 3 - Prob. 18AE Ch. 3 - Prob. 19AE Ch. 3 - Prob. 20AE Ch. 3 - Prob. 21AE Ch. 3 - Prob. 22AE Ch. 3 - Prob. 23AE Ch. 3 - Prob. 24AE Ch. 3 - Prob. 25AP Ch. 3 - Prob. 26AP Ch. 3 - Prob. 27AP Ch. 3 - Prob. 28AP Ch. 3 - Prob. 29AP Ch. 3 - Prob. 30AP Ch. 3 - Prob. 31AP Ch. 3 - Prob. 32AP Ch. 3 - Prob. 33AP Ch. 3 - Prob. 34AP Ch. 3 - Prob. 35AP Ch. 3 - Prob. 36AP Ch. 3 - Prob. 1BE Ch. 3 - Prob. 2BE Ch. 3 - Prob. 3BE Ch. 3 - Prob. 4BE Ch. 3 - Prob. 5BE Ch. 3 - Prob. 6BE Ch. 3 - Prob. 7BE Ch. 3 - Prob. 8BE Ch. 3 - Prob. 9BE Ch. 3 - Prob. 10BE Ch. 3 - Prob. 11BE Ch. 3 - Prob. 12BE Ch. 3 - Prob. 13BE Ch. 3 - Prob. 14BE Ch. 3 - Prob. 15BE Ch. 3 - Prob. 16BE Ch. 3 - Prob. 17BE Ch. 3 - Prob. 18BE Ch. 3 - Prob. 19BE Ch. 3 - Prob. 20BE Ch. 3 - Prob. 21BE Ch. 3 - Prob. 22BE Ch. 3 - Prob. 23BE Ch. 3 - Prob. 24BE Ch. 3 - Prob. 25BP Ch. 3 - Prob. 26BP Ch. 3 - Prob. 27BP Ch. 3 - Prob. 28BP Ch. 3 - Prob. 29BP Ch. 3 - Prob. 30BP Ch. 3 - Prob. 31BP Ch. 3 - Prob. 32BP Ch. 3 - Prob. 33BP Ch. 3 - Prob. 34BP Ch. 3 - Prob. 35BP Ch. 3 - Prob. 36BP Ch. 3 - Prob. 1ATC Ch. 3 - Prob. 3ATC Ch. 3 - Prob. 4ATC Ch. 3 - Prob. 5ATC Ch. 3 - Prob. 6ATC Ch. 3 - Prob. 7ATC Ch. 3 - Prob. 9ATC Ch. 3 - Prob. 10ATC Ch. 3 - Prob. 1CP

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