Chapter 4, Problem 1E

To determine

Introduction: At the end of an accounting cycle all accounts which are categorized in terms of Assets, Liabilities ,Incomes , Expenses and Equity(Capital) needs to be closed. Such balances will have to be transferred to either the Income Statement or the Balance Sheet.

All Expense and Income accounts will be transferred to the Income Statement. (All expenses will be debited and incomes will be credited in the Income Statement)

All Assets, Liabilities and Equity accounts will be transferred to the Balance Sheet.( All Assets will be debited , Equity and Liabilities will be credited in the Balance Sheet)

Match: 16 accounts from adjusted trial balance with appropriate financial statement column.

Given Information:

16 Accounts

1) Interest Revenue

2) Machinery

3) Owner, Withdrawals

4) Depreciation Expense

5) Accounts Payable

6) Service Fees Revenue

7) Owner, Capital

8) Interest Expense

9) Accounts Receivable

10) Accumulated depreciation

11) Office supplies

12) Insurance expense

13) Interestreceivable

14) Cash

15) Rent expense

16) Wages payable

Financial Statement Columns

A- Debit column of Income statement column.

B- Credit column of Income statement column.

C- Debit column of Balance sheet and statement of owner’s equity column

D- Credit column of Balance sheet and statement of owner’s equity column

Solution:

B 1) Interest Revenue

C-2) Machinery

C-3) Owner, Withdrawals

A-4) Depreciation Expense

D-5) Accounts Payable

B-6) Service Fees Revenue

D-7) Owner, Capital

A-8) Interest Expense

C-9) Accounts Receivable

D-10) Accumulated depreciation

A-11) Office supplies

A-12) Insurance expense

C-13) Interest receivable

C-14) Cash

A-15) Rent expense

D-16) Wages payable