Cash basis of accounting Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid. Accrual basis of accounting: Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged. 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. 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. T-account: T-account refers to an individual account, where the increases or decreases in the value of specific asset, liability, stockholder’s equity , revenue, and expenditure items are recorded. This account is referred to as the T-account, because the alignment of the components of the account resembles the capital letter ‘T’.’ An account consists of the three main components which are as follows: (a) The title of the account (b) The left or debit side (c) The right or credit side To journalize: The transaction as given in the book of Company G for the year 2014.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 4.1BP

(a)

To determine

Cash basis of accounting

Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid.

Accrual basis of accounting:

Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged.

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.

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.

T-account:

T-account refers to an individual account, where the increases or decreases in the value of specific asset, liability, stockholder’s equity, revenue, and expenditure items are recorded.

This account is referred to as the T-account, because the alignment of the components of the account resembles the capital letter ‘T’.’ An account consists of the three main components which are as follows:

(a) The title of the account

(b) The left or debit side

(c) The right or credit side

To journalize: The transaction as given in the book of Company G for the year 2014.

(b)

To determine

The amount of cash received during the year ended September 30, 2014.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

provide accounting question solution

Landry Manufacturing has two operating departments: Blending and Shaping. Blending has 300 employees and occupies 25,000 ft². Shaping has 100 employees and occupies 20,000 ft². Indirect factory costs for the current month are: administrative, $920,000; and maintenance, $250,000. Administrative costs are allocated to operating departments based on the number of workers. Determine the administrative costs allocated to each operating department.

Provide correct option general accounting question