Explanation Journalizing: Journalizing refers to that process in which the transactions of an organization are recorded in a sequence. Based on the recorded entries, the accounts are posted to the relevant ledger accounts. 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, expense, dividends, and owner’s drawing accounts, and all decrease in liabilities, revenues and owner’s capital accounts. Credit, all increase in liabilities, revenues, and owner’s capital accounts, and all decrease in assets, expenses, and owner’s drawing account. Record investment: Date Account Title and Explanation Post Ref. Debit ($) Credit ($) September 1, 2019 Cash 30,000 ZM-Capital 30,000 (Record investment.) Table (1) When investment is made, cash (asset) is increased. Hence, debit Cash account with $30,000. Capital is component of stockholders’ equity and is increased due to investment. Hence, credit ZM Capital account with $30,000. Record purchase of equipment: Date Account Title and Explanation Post Ref. Debit ($) Credit ($) September 4, 2019 Equipment 3,250 DN Incorporation 3,250 (Record purchase of equipment, invoice 9823.) Table (2) Equipment is an asset and asset is increased due to purchase made. Hence, equipment account is debited with $3,250. Equipment is purchased from DN Incorporation on credit. Hence, DN Incorporation is a liability and increased. Hence, credit DN Incorporation account with $3,250. Record automobile purchase: Date Account Title and Explanation Post Ref. Debit ($) Credit ($) September 16, 2019 Automobile 15,000 Cash 15,000 (Record purchase of automobile, check-1001) Table (3) Automobile is an asset and is increased due to purchase made. Hence, automobile account is debited with $15,000. Cash is an asset and is decreased due to purchase made on cash. Hence, cash account is credited with $15,000. Record purchase of supplies: Date Account Title and Explanation Post Ref. Debit ($) Credit ($) September 20, 2019 Supplies 260 Cash 260 (Record purchase of supplies, check-1002) Table (4) Supplies is an asset and asset is increased due to purchase of supplies. Hence, supplies account is debited with $260. Supplies were purchased on cash. Cash is an asset and is decreased. Hence, cash account is credited with $260. Record return of supplies: Date Account Title and Explanation Post Ref. Debit ($) Credit ($) September 23, 2019 Cash 85 Supplies 85 (Record return of supplies) Table (5) Supplies were returned and hence, cash was also returned...

4th Edition

ISBN: 9781260255157

Author: Haddock

Publisher: MCG CUSTOM

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COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<

Ch. 4 - The part of the journal entry to be recorded first...Ch. 4 - A general journal is like a(n): a. address book....Ch. 4 - Why are check and invoice numbers included in the...Ch. 4 - Prob. 1.4SRQ Ch. 4 - Prob. 1.5SRQ Ch. 4 - Prob. 1.6SRA Ch. 4 - Prob. 2.1SRQ Ch. 4 - Prob. 2.2SRQ Ch. 4 - What is entered in the Posting Reference column of...Ch. 4 - Prob. 2.4SRE

Ch. 4 - Prob. 2.5SRE Ch. 4 - Prob. 2.6SRA Ch. 4 - What is recorded in the Posting Reference column...Ch. 4 - Prob. 2CSR Ch. 4 - Prob. 3CSR Ch. 4 - Prob. 4CSR Ch. 4 - Prob. 5CSR Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - What is a ledger?Ch. 4 - What is posting?Ch. 4 - Prob. 5DQ Ch. 4 - Prob. 6DQ Ch. 4 - What is a compound journal entry?Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 9DQ Ch. 4 - Prob. 10DQ Ch. 4 - Prob. 11DQ Ch. 4 - Prob. 1E Ch. 4 - Prob. 2E Ch. 4 - Prob. 3E Ch. 4 - Compound journal entries. The following...Ch. 4 - Prob. 5E Ch. 4 - Recording a correcting entry. On August 22, 2019,...Ch. 4 - Prob. 1PA Ch. 4 - On October 1, 2019, Helen Kennedy opened an...Ch. 4 - The following journal entries were prepared by an...Ch. 4 - Prob. 4PA Ch. 4 - Prob. 1PB Ch. 4 - Prob. 2PB Ch. 4 - Prob. 3PB Ch. 4 - Prob. 4PB Ch. 4 - Prob. 1CTP Ch. 4 - Prob. 2CTP Ch. 4 - Prob. 1MF Ch. 4 - Prob. 2MF Ch. 4 - Prob. 3MF Ch. 4 - Prob. 4MF Ch. 4 - Prob. 1ED

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Solution Summary: The author explains the rules of debiting and crediting different accounts while they occur in business transactions.

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